Customer Acquisition Cost (CAC) Calculator

CAC and LTV are computed from entirely separate inputs in this calculator. CAC is total marketing plus sales spend divided by customers acquired -- average revenue and churn rate never enter that formula. Average revenue only feeds the Lifetime Value (LTV) calculation and the LTV:CAC ratio and payback period that depend on it, so changing it moves those figures while leaving CAC exactly where it was.

A ratio of 3x or higher is the widely cited benchmark for a healthy, scalable acquisition channel -- meaning each customer is worth roughly three times what it cost to acquire them, leaving enough margin to cover overhead, support, and further growth investment. A ratio near or below 1x means you're spending close to or more than a customer is worth over their lifetime, which is not sustainable without other revenue offsetting it.

In this calculator's formula, yes -- CAC is total spend divided by customers acquired, so with spend held constant, acquiring more customers mechanically lowers the per-customer cost. In the real world this relationship can break down at scale, since acquiring additional customers often requires additional spend on new channels or higher bids on existing ones, which this simple ratio does not model.

CAC is a single dollar figure -- what one customer cost to acquire. Payback period converts that into time: it divides CAC by the customer's monthly revenue (average annual revenue divided by 12) to estimate how many months of revenue are needed before that acquisition cost is recovered. A lower CAC or higher average revenue both shorten the payback period, even though only one of those inputs also affects CAC itself.