CAC calculator
Customer acquisition cost is what you pay to win one new customer: acquisition spend divided by new customers. It is the number your margin has to beat. Solve it any way, add your gross profit per order, and see how fast you earn it back.
The number you searched for is one step. Run it all the way down to profit, then change anything on the right to see what moves the bottom line.
Weakest link: conversion rate (2% vs 2.8% typical). Bring it to 2.8% and baseline profit goes to $-604, a +$399 swing, more than tuning any cost metric.
Drop in one product and the Target ROAS calculator works your real P&L backwards to the exact number to optimize, free, no signup.
CPA is the closest of these to the truth, but it is still pre-margin. A $50 CPA is excellent at a $200 order with 60% margin and fatal at a $30 order. Judge CPA against your gross profit per order, which is exactly what the main calculator does. Source.
What is customer acquisition cost (CAC)?
CAC is what it costs, all in, to win one new customer: total acquisition spend divided by new customers. It is the number every other metric in the funnel rolls up into, and the one that decides whether growth is profitable.
How to calculate CAC
What is a good CAC?
CAC is meaningless without margin and repeat behind it. The same number can be a gift or a disaster.
A $120 CAC against a first-order gross profit of $1,800 is a spectacular buy. The same $120 CAC against a $40 first-order gross profit is a loss on every customer, rescued only if they come back. Judge CAC against first-order contribution and the repeat curve, never on its own.
How to lower CAC
- Lift conversion rate and AOV; both lower the cost of each resulting customer without touching ad prices.
- Improve targeting and creative so spend reaches people who actually buy.
- Lower CPC and CPM upstream (see the CPC and CPM calculators).
- Raise repeat purchase so you can afford a higher CAC and still profit. Check the payback period and LTV:CAC.
The operator’s playbook
How a paid-media operator reads this number, not a glossary definition.
CAC is meaningless without margin and repeat+
An $80 CAC is a gift at a $300 order with 60% margin and a death sentence at a $30 order. The number only means something next to your gross profit per order and how often customers come back.
Steer by payback, not the ratio+
LTV:CAC of 3:1 is the headline, but payback period is the operating metric. It tells you how much cash you need to scale: a 2-month payback lets you reinvest fast; a 9-month payback needs a war chest. The faster the payback, the harder you can push.
CAC is not CPA+
CPA is cost per action (any conversion). CAC is specifically the cost to acquire a paying customer, so it is the one that has to clear your margin. Blended CAC also hides the truth: new-customer CAC is always higher than blended.
Frequently asked questions
How do you calculate CAC?
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Total acquisition spend divided by new customers in the same period. $20,000 to win 250 customers is an $80 CAC. This tool also solves for the spend or customer count you need to hit a target CAC.
What is a good CAC?
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One your gross profit pays back quickly and that keeps a healthy LTV:CAC, often around 3:1. The number alone means nothing without your margin and repeat rate.
What is CAC payback?
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How long a customer's cumulative gross profit takes to cover what you paid to acquire them. Operators steer by months. Faster payback means less cash needed to scale.
What is the difference between CAC and CPA?
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CPA is the cost of any action (a lead, an add-to-cart, a sale). CAC is specifically the cost of a new paying customer. They match only when the action you count is a first purchase.
Why is my CAC so high?
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Trace the funnel: a high CPM or CPC, a low conversion rate, or weak targeting all roll up into CAC. Fixing conversion rate and AOV usually moves it fastest.
What costs should be included in CAC?
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All acquisition spend that wins new customers: ad spend, agency or tool fees, and creative costs, divided by new customers. Keep retention spend out, or CAC looks worse than it is.
Built by Yehonatan Tav, paid media for ecommerce brands spending $50k to $500k a month. Figures are illustrative; run the logic on your own numbers.