CAC Calculator: Calculate Your
Customer Acquisition Cost
Use our free CAC calculator to instantly determine your Customer Acquisition Cost, LTV:CAC ratio, and payback period.
CAC Calculator
Calculate your Customer Acquisition Cost instantly
Input Values
Total spent on ads, content, SEO, etc.
Sales team salaries, commissions, tools
Number of new customers in the period
Enter to calculate conversion rate & cost per visitor
Enter to calculate LTV:CAC ratio
Enter both to calculate CAC payback period
Results
Enter your acquisition data
Results will appear here
Know Your Customer LTV
StoreRadar calculates Customer Lifetime Value automatically, so you can compare it to your CAC and ensure profitable growth.
What is Customer Acquisition Cost (CAC)?
Understanding the true cost of growing your customer base
Customer Acquisition Cost (CAC) is the total cost of acquiring a new customer, including all marketing and sales expenses. It's one of the most important metrics for ecommerce because it directly impacts profitability and determines how much you can invest in growth.
The CAC Formula
Example: If you spent $15,000 on marketing and sales in a month and acquired 200 new customers:
CAC = $15,000 / 200 = $75
Understanding your CAC is essential because it tells you whether your growth is sustainable. If your CAC is higher than the value each customer brings (LTV), you're losing money on every acquisition. The ideal LTV:CAC ratio is 3:1 or higher—earning $3 for every $1 spent on acquisition.
How to Track CAC in WooCommerce
Three ways to calculate Customer Acquisition Cost for your WooCommerce store
Option 1: Spreadsheet Analysis
Export your WooCommerce orders and manually match with marketing spend data from ad platforms. Requires regular exports and careful attribution.
- No additional software costs
- Full control over attribution
- Time-consuming data exports
- Difficult to track by channel
- No real-time visibility
Option 2: Google Analytics
Use GA4's acquisition reports to track costs and conversions. Requires manual cost data import and proper e-commerce tracking setup.
- Free to use
- Multi-channel attribution
- Complex setup
- Cookie limitations
- Manual cost imports
Option 3: Dedicated Analytics Tool
Use a dedicated ecommerce analytics platform that integrates with your ad platforms and WooCommerce to calculate CAC by channel automatically.
- Automatic channel attribution
- Real-time visibility
- Cross-platform data
- Monthly subscription
- Requires ad platform integrations
How to Calculate CAC (Step-by-Step)
Follow these four steps to calculate your Customer Acquisition Cost
Sum Up Marketing Expenses
Add all marketing costs: paid advertising, content creation, SEO, email marketing tools, marketing team salaries, and agency fees.
Add Sales Expenses
Include sales team salaries, commissions, CRM software, sales tools, and any other costs directly tied to converting leads to customers.
Count New Customers
Determine the number of new customers acquired during the same period. Only count first-time customers, not repeat purchases.
Apply the CAC Formula
Divide your total acquisition spend by the number of new customers to get your Customer Acquisition Cost.
CAC vs Related Metrics
Understanding how CAC relates to other key acquisition metrics
| Metric | Definition | Formula | Example |
|---|---|---|---|
| CAC | Cost to acquire one customer | Total Acquisition Cost / New Customers | $100 |
| LTV | Total expected revenue from a customer | AOV × Purchase Frequency × Lifespan | $500 |
| LTV:CAC Ratio | Return on acquisition investment | LTV / CAC | 5:1 |
| CAC Payback | Months to recover acquisition cost | CAC / (AOV × Margin) | 3 months |
| Conversion Rate | Visitors who become customers | Customers / Visitors × 100 | 2.5% |
How to Reduce Your CAC
Four strategies to lower your customer acquisition cost
Optimize Conversion Rates
Improving your website conversion rate from 2% to 3% reduces CAC by 33% without changing ad spend. Focus on landing pages, checkout flow, and user experience.
Invest in Organic Channels
SEO, content marketing, and social media have lower marginal costs over time. Building organic traffic reduces dependence on paid acquisition.
Launch Referral Programs
Referred customers typically have lower CAC and higher LTV. Incentivize existing customers to refer new ones with discounts or credits.
Improve Targeting
Better audience targeting reduces wasted ad spend. Use lookalike audiences, retargeting, and first-party data to reach high-intent prospects.
Understanding CAC Benchmarks
What your LTV:CAC ratio and payback period tell you about your business
LTV:CAC Ratio
Unsustainable
You're spending more to acquire customers than they're worth. Urgent action needed.
Needs Improvement
Profitable but tight margins. Focus on reducing CAC or increasing LTV.
Healthy
Strong unit economics. You can confidently scale acquisition spend.
CAC Payback Period
Excellent
Fast payback enables aggressive growth. You can reinvest quickly.
Acceptable
Standard for ecommerce. Watch cash flow and aim to improve.
Concerning
Long payback strains cash flow and limits growth potential.
Pro Tip: Calculate CAC by Channel
Your blended CAC hides significant differences between acquisition channels. Facebook Ads might have a $50 CAC while Google Ads is $150. Calculate CAC by channel to identify your most efficient sources and reallocate budget for maximum ROI.
Common CAC Mistakes to Avoid
Four errors that lead to inaccurate acquisition cost calculations
Missing Hidden Costs
Many businesses forget to include salaries, software subscriptions, agency fees, and overhead costs. Your CAC should capture the full cost of your acquisition efforts.
Mixing Time Periods
Marketing spend in January might result in customers in February. Use consistent attribution windows and consider the lag between spend and acquisition.
Not Segmenting by Channel
Your overall CAC hides significant differences between channels. Calculate CAC by acquisition source (paid, organic, referral) to optimize spend allocation.
Ignoring Customer Quality
A low CAC is meaningless if you're acquiring customers who churn quickly or have low LTV. Always analyze CAC alongside LTV and retention metrics.
Frequently Asked Questions
Common questions about Customer Acquisition Cost
Customer Acquisition Cost (CAC) is the total cost of acquiring a new customer, including all marketing and sales expenses. It's calculated by dividing your total acquisition spend by the number of new customers acquired in a given period. CAC is one of the most important metrics for understanding the efficiency of your growth efforts.
The basic CAC formula is: CAC = Total Marketing & Sales Spend / Number of New Customers. For example, if you spent $10,000 on marketing and sales in a month and acquired 100 new customers, your CAC is $10,000 / 100 = $100 per customer.
CAC should include all costs directly related to acquiring new customers: advertising spend (paid ads, social media), marketing team salaries, sales team salaries and commissions, marketing software and tools, content creation costs, agency fees, and any other expenses specifically tied to customer acquisition.
A 'good' CAC depends on your Customer Lifetime Value (LTV). The benchmark is an LTV:CAC ratio of 3:1 or higher—meaning you earn $3 for every $1 spent on acquisition. You should also consider payback period: ideally, you should recover your CAC within 12 months, and under 6 months is excellent.
CAC (Customer Acquisition Cost) measures the total cost to acquire a paying customer, including all marketing and sales expenses. CPA (Cost Per Acquisition) typically refers to the cost of a specific conversion action (like a signup or lead) from a particular campaign. CAC is a business-wide metric; CPA is often campaign-specific.
There are several strategies to lower CAC: improve targeting to reduce wasted ad spend, optimize conversion rates on your website, invest in organic channels (SEO, content, referrals), improve sales efficiency, focus on higher-value customer segments, and reduce churn to increase lifetime value which improves your LTV:CAC ratio.
Track Customer LTV Automatically
Know the lifetime value of your customers so you can set the right CAC targets. StoreRadar calculates LTV in real-time for every customer segment.
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