Use this CAC calculator to understand how much it costs your business to acquire a new customer. This is essential for making informed decisions about your marketing and sales strategies, such as allocating your budget, comparing yourself to your competitors, and identifying areas for improvement.

CAC Formula:

Customer Acquistion Cost 🟰 Cost of Sales and Marketing ➗ Number of New Customers Acquired

What is CAC, Anyway?

CAC (customer acquisition cost) is the total cost of acquiring a new customer. It includes all marketing and sales expenses, such as salaries, commissions, advertising, and technology costs.

The cost of sales and marketing includes all expenses related to acquiring new customers, such as:

• Advertising costs
• Marketing campaign costs
• Commissions and bonuses paid to sales representatives
• Salaries of marketers and sales managers
• Overhead costs related to sales and marketing

The number of new customers acquired is the total number of new customers acquired over a specific period of time, such as a month, quarter, or year.

Example:

Company A spends $100,000 on sales and marketing in a quarter and acquires 1,000 new customers during that time. The company’s CAC for that quarter would be $100 per customer.

CAC = $100,000 / 1,000 customers = $100/customer

TL;DR: CAC can help businesses to determine the profitability of their marketing and sales efforts, identify areas where they can reduce costs, make better decisions about how to allocate their budget and compare their CAC to their competitors. The lower your CAC, the better.