What should go into CAC?
Media spend, the salaries of the people who run acquisition, agency and freelance fees, and the tools they use. Not product, not support, not fulfilment: those serve customers you already have.
CAC Calculator
What it really costs to win a customer, including the parts an ad platform cannot see.
Enter your media spend, the team and tool costs behind it, and the new customers you won. The gap between this and your platform figure is the part nobody reports.
Everything here is worked out in your browser. Nothing you type is sent anywhere, and there is no account to make.
Salaries, retainers, freelancers. The part the platforms never see.
New only. Repeat orders from existing customers do not belong in an acquisition cost.
Optional. Adds the LTV to CAC ratio. Use the contribution version.
Optional. Gives the payback period in months.
Result
The numbers below are an example so the tool opens working. Replace them with yours.
How the number is worked out
- CAC is deliberately larger than a platform cost per acquisition. The difference is the salaries, retainers and tools that produced the campaigns, and leaving them out is the most common way this number gets understated.
- Only NEW customers go in the denominator. Counting repeat orders makes acquisition look cheap by crediting it with revenue it did not acquire.
What comes out
You will see
- CAC, everything you spent divided by the customers you won
- The total acquisition cost the figure was built from
- Media only cost per customer, so the gap is visible
- LTV to CAC ratio, when you enter a lifetime value
- Payback period in months, when you enter a monthly contribution
- A warning when only media spend was entered, because that is a CPA and not a CAC
How to use it
Three steps, and the third one is the point
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Start with media spend
Everything you paid the platforms in the period, across every channel you are attributing these customers to.
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Add the costs the platforms cannot see
Salaries, agency retainers, freelancers, tools. This is the step that turns a cost per acquisition into a customer acquisition cost.
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Count only NEW customers
Repeat orders from people you already had did not need acquiring. Counting them makes acquisition look cheap by crediting it with revenue it did not win.
What CAC includes that a platform figure does not
Customer acquisition cost is everything you spent to win a customer, divided by the customers you won. The important word is everything: the media, the people who ran it, the agency, and the software they used.
An ad platform can only see its own spend, so the number it reports is always smaller. On the example figures here it is 160 against a real CAC of 230, and the 70 in between is the part no report shows you.
Both figures appear in the result for that reason. Seeing them next to each other is usually the first time the gap gets looked at.
CAC is a number, payback is a decision
A ratio tells you whether a customer is worth more than they cost. It does not tell you whether you can afford to wait for it, and those are different questions.
Payback period answers the second one: how many months a customer takes to return what you spent winning them. A business paying for stock up front and waiting eleven months to get its acquisition cost back needs funding, whatever the ratio says.
That is why the payback line sits under the ratio rather than instead of it. The ratio is about whether growth works; payback is about whether it can be paid for.
The tool
What this one does
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Adds the invisible costs
Team, agency and tools sit next to media spend, which is the difference between a CAC and a platform number.
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Shows both figures
The real CAC and the media only version, so the gap between what you spend and what gets reported is on screen.
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Warns when it is not really a CAC
Enter media alone and the tool says so. Salaries and tools usually add between 20% and 60%, and leaving them out is how this number gets understated.
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Gives the LTV ratio
Enter a lifetime value and you get the ratio, with a note on where the three to one convention came from and why it may not fit you.
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Gives the payback period
Months to recover the acquisition cost, which is the figure that decides whether growth needs funding.
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Says when the numbers do not work
A ratio under one to one means you pay more for a customer than they are worth, and the tool names it rather than printing it flat.
Reading the result
What each line is telling you
- CAC
- The full cost of one customer. This is the number to hold against lifetime value.
- Media only cost per customer
- What the platforms would report. Useful as a comparison and dangerous as a target.
- LTV to CAC ratio
- Use the contribution version of LTV. Using the revenue version inflates this by exactly your cost of goods.
- Payback period
- Months to recover the cost. Under twelve is comfortable for most businesses; the longer it runs, the more working capital growth needs.
A free tool answers one question.
A search audit answers the rest.
We look at your search visibility across Google and the answer engines, and tell you what is costing you orders. No charge for the first look.
In practice
What you can do with it
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Find the number your board asks for
Platform figures are not CAC, and presenting one as the other is the fastest way to lose an argument later.
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Compare channels on the same basis
A channel that needs three people to run it is not cheap because its media is. Split the team cost across channels and compare properly.
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Work out whether growth needs funding
A long payback with a healthy ratio is a cash flow question rather than a marketing one, and it is better asked early.
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Check a retainer against what it produced
Put the retainer in the team cost. If CAC moves more than the media saved, that is the answer.
Questions
CAC Calculator questions
What is a good LTV to CAC ratio?
Three to one is quoted everywhere and it came from software, where gross margins are far higher than a business buying stock. A store funding inventory usually wants four to one, because the cash leaves earlier and comes back later.
Should I use gross revenue LTV or contribution LTV?
Contribution, after cost of goods. The revenue version makes the ratio look better by exactly the amount your goods cost, which is the one part of it you never get to keep.
Do repeat customers go in the denominator?
No. Only new customers. Including repeats credits acquisition with revenue that came from retention, and makes the cheapest looking channel the one selling to people you already had.
What period should I measure over?
Long enough for the spend and the customers to line up. A month is usually too short for anything with a sales cycle: the customers who signed in March were often reached in January.
Is my data sent anywhere?
No. Everything is worked out in your browser, with no account and nothing uploaded.
The rest of the set
Fifteen more, all free, all in the browser
- CPM Calculator Work out what a thousand impressions costs, or what a budget buys at a given CPM.
- CTR Calculator Clickthrough rate from clicks and impressions, or the impressions a target needs.
- Conversion Rate Calculator Conversion rate from visitors and conversions, with revenue per visitor beside it.
- ROAS Calculator Return on ad spend, the ACoS behind it, and whether your margin leaves any profit.
- CPC Calculator What one click costs, and what it costs by the time it becomes an order.
- CPA Calculator Cost per acquisition from media spend, and the ceiling your margin allows.
- ARR Calculator Annual recurring revenue, with the net new figure that shows the direction.
- AOV Calculator Average order value, and what a target is worth against the same order count.
- Cost Per Lead Calculator What an enquiry costs, and what it costs once the unqualified half is priced in.
- llms.txt Generator Build an llms.txt file that tells AI crawlers which pages on your store matter.
- LTV Calculator Work out what a customer is worth over time, so you know what you can pay to win one.
- Schema Markup Generator Generate the JSON-LD a product, article or FAQ page needs, ready to paste.
- Break-even ROAS Find the return on ad spend where a campaign stops costing you money.
- CRO ROI Calculator See what a conversion rate change is worth against the traffic you already have.
- Hreflang Generator Produce the hreflang tags a multi-country store needs, without the usual mistakes.
Customer acquisition cost is the half of the ratio you can move this month. The other half is lifetime value, and a CAC that looks high is often a payback question rather than a spending one.
Where this comes up