Customer Acquisition Cost (CAC) Calculator — CAC & LTV:CAC Ratio
Calculate your customer acquisition cost, lifetime value, and LTV:CAC ratio. Free CAC calculator for startups and small businesses to measure marketing efficiency.
Inputs
Enter the minimum numbers needed to get a result.
Formula and example
CAC = (Marketing Spend + Sales Spend) / New Customers; LTV = Avg Revenue/Month × Lifespan; LTV:CAC = LTV / CAC
With $5,000 marketing + $3,000 sales = $8,000 total spend, and 50 new customers: CAC = $160. At $200/month revenue over 24 months, LTV = $4,800. LTV:CAC ratio = 30:1 with 0.8 months to recover CAC.
Methodology & assumptions
Last updated: 2026-06-13Calculation method
Calculates CAC as total acquisition spend divided by new customers in a period. LTV is computed as monthly revenue per customer multiplied by average customer lifespan. The LTV:CAC ratio is the primary metric for SaaS and subscription businesses — a ratio above 3:1 is generally considered healthy.
Data sources
Uses the numbers you enter and standard small-business finance formulas. Benchmark comparisons use HustleFin industry benchmark pages where available.
Limitations
Assumes constant customer spend and retention. Does not account for customer expansion/contraction revenue, discount rates, or variable costs to serve. CAC should ideally be segmented by channel (paid, organic, referral) for accurate optimization.
Input definitions
- Monthly marketing spend: Total marketing costs: ads, content, SEO, tools.
- Monthly sales cost: Sales team costs, commissions, CRM, and outreach tools.
- New customers per month: Average number of new customers acquired per month.
- Avg revenue per customer/month: Average monthly revenue from a single customer.
- Avg customer lifespan: Average number of months a customer stays active.
Frequently asked questions
What is a good LTV:CAC ratio?+
3:1 or higher is generally considered healthy. A 1:1 ratio means you break even; below 1:1 you lose money on each customer. Top-performing SaaS companies typically have 5:1 or better.
What counts as marketing and sales spend?+
Marketing: ad spend, content marketing, SEO tools, social media. Sales: salaries, commissions, CRM software, demo tools, travel. Include all costs related to acquiring customers in the given period.
How quickly should I recover my CAC?+
For SaaS, aim to recover CAC within 12 months. For ecommerce, within 3-6 months. Faster payback means better cash flow and the ability to reinvest in growth.
How is CAC different from cost per lead (CPL)?+
CAC measures the cost to acquire a paying customer. CPL measures the cost to get someone's contact info. CAC accounts for conversion rates: if CPL is $10 but only 10% of leads convert, your CAC is $100.
What if my LTV:CAC ratio is below 1?+
Your business is losing money on each customer. Immediate fixes: reduce acquisition costs (pause low-performing channels), increase prices, improve retention to raise LTV, or target higher-value customer segments.
Related guides
Go deeper with in-depth guides on the concepts behind this calculator.
Continue the workflow
Estimate margin, convert margin to markup, then check the sales volume needed to break even.