How do I calculate CAC (Customer Acquisition Cost)?

Use the formula(s) on this page. Keep inputs consistent by period and basis.

What are good benchmarks?

Benchmarks vary by model and stage. See Benchmarks on this page for ranges.

Inconsistent definitions/time windows; wrong basis (revenue vs gross profit).

Pitchkit

CAC (Customer Acquisition Cost)

Cost to acquire one new paying customer.

Why it matters

CAC shows how efficiently spend becomes new customers. Use with payback period and LTV.

Be consistent on definition, and know variants investors may ask about.

What to include

At minimum: media spend and attributable variable costs.

Fully loaded: add sales and marketing salaries, software, contractors, and creative tied to acquisition.

Benchmarks

SMB: paid CAC ~$300–$1k; Mid-market: $1k–$4k; Enterprise: $5k–$20k (varies).

Target gross-margin payback: SMB < 12–15 mo; Mid 12–18; Ent 18–24.

Worked example

Q2 S&M = $120k; New customers = 240 → Blended CAC = $500.

Paid media = $90k; Paid customers = 180 → Paid CAC = $500.

Common pitfalls

Mixing paid vs blended CAC; inconsistent time windows; counting trials instead of paid.

Excluding discounts/credits or referral fees; not separating enterprise pilots.

How to show in your deck

Financials/Traction slide: 'Blended CAC $500; GM payback 12.5 mo; LTV/CAC 3.8x'.

Deck snippet

CAC $500; GM payback 12.5 mo; LTV/CAC 3.8x.

Formulas

Blended CAC

(Total sales + marketing costs in period) / (New customers in period)

Includes all channels and costs. Smooths channel noise; useful for board-level tracking.

Paid CAC

(Paid media spend + attributable variable costs) / (New customers from paid channels)

Use for paid channel efficiency. Excludes salaries and organic demand.

Fully loaded CAC

(Paid media + SDR/AE salaries + tools + creative) / (All new customers)

Common investor ask. Be explicit about inclusions.

FAQs

Payback periodSee LTVSee LTV:CAC ratioSee

CAC (Customer Acquisition Cost)

Cost to acquire one new paying customer.

Why it matters

CAC shows how efficiently spend becomes new customers. Use with payback period and LTV.

Be consistent on definition, and know variants investors may ask about.

What to include

At minimum: media spend and attributable variable costs.

Fully loaded: add sales and marketing salaries, software, contractors, and creative tied to acquisition.

Benchmarks

SMB: paid CAC ~$300–$1k; Mid-market: $1k–$4k; Enterprise: $5k–$20k (varies).

Target gross-margin payback: SMB < 12–15 mo; Mid 12–18; Ent 18–24.

Worked example

Q2 S&M = $120k; New customers = 240 → Blended CAC = $500.

Paid media = $90k; Paid customers = 180 → Paid CAC = $500.

Common pitfalls

Mixing paid vs blended CAC; inconsistent time windows; counting trials instead of paid.

Excluding discounts/credits or referral fees; not separating enterprise pilots.

How to show in your deck

Financials/Traction slide: 'Blended CAC $500; GM payback 12.5 mo; LTV/CAC 3.8x'.

Deck snippet

CAC $500; GM payback 12.5 mo; LTV/CAC 3.8x.

Formulas

Blended CAC

(Total sales + marketing costs in period) / (New customers in period)

Includes all channels and costs. Smooths channel noise; useful for board-level tracking.

Paid CAC

(Paid media spend + attributable variable costs) / (New customers from paid channels)

Use for paid channel efficiency. Excludes salaries and organic demand.

Fully loaded CAC

(Paid media + SDR/AE salaries + tools + creative) / (All new customers)

Common investor ask. Be explicit about inclusions.

FAQs

Payback periodSee LTVSee LTV:CAC ratioSee

CAC (Customer Acquisition Cost)

Cost to acquire one new paying customer.

Why it matters

What to include

Benchmarks

Worked example

Common pitfalls

How to show in your deck

Deck snippet

Formulas

FAQs

Related

CAC (Customer Acquisition Cost)

Cost to acquire one new paying customer.

Why it matters

What to include

Benchmarks

Worked example

Common pitfalls

How to show in your deck

Deck snippet

Formulas

FAQs

Related

CAC (Customer Acquisition Cost)

Cost to acquire one new paying customer.

Why it matters

What to include

Benchmarks

Worked example

Common pitfalls

How to show in your deck

Deck snippet

Formulas

FAQs

How do I calculate CAC?

What are good benchmarks?

Common pitfalls?

Related

CAC (Customer Acquisition Cost)

Cost to acquire one new paying customer.

Why it matters

What to include

Benchmarks

Worked example

Common pitfalls

How to show in your deck

Deck snippet

Formulas

FAQs

How do I calculate CAC?

What are good benchmarks?

Common pitfalls?

Related