CAC (Customer Acquisition Cost)
CAC is the full cost of winning one new customer. Divide total sales and marketing spend by the number of new customers.
Updated October 1, 2026
CAC (Customer Acquisition Cost) is the total cost of winning one new customer. Add up everything you spent on sales and marketing in a period, then divide by the number of new customers you gained.
How to calculate CAC
CAC = total sales and marketing spend ÷ new customers acquired
If you spent $40,000 on sales and marketing in a quarter and gained 200 customers, CAC is $200. Count salaries, commissions, agency and contractor fees, software, and creative work, not only ad spend. Leaving out salaries is the most common way teams understate CAC.
Two refinements help:
- Blended vs paid CAC. Blended CAC divides by all new customers, including organic ones. Paid CAC counts only customers from paid channels, so it shows how well those channels perform.
- Timing. Spend in one month can bring in customers months later. With long sales cycles, match spend to the customers it brought in, not to the calendar month.
Why CAC matters
CAC only means something next to other numbers. Compared with LTV, it gives the LTV:CAC ratio, which tells you whether acquisition pays off. Divided by monthly gross profit per customer, it gives the CAC payback period. If CAC rises faster than ARPA, a channel may be saturated or bringing in weaker customers.