CAC Calculator (Customer Acquisition Cost)
Enter total marketing spend and how many new customers it brought in. Add your Customer Lifetime Value (optional) to see a CLV:CAC ratio verdict — results update instantly as you type.
Results and any AI-generated content from this tool are provided free, "as is", for general informational purposes only and may be inaccurate, incomplete, or out of date. Always verify the output yourself before relying on it — you use this tool and its results at your own risk.
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How Customer Acquisition Cost is calculated
Customer Acquisition Cost (CAC) is how much you spend, on average, to win
one new customer: CAC = Marketing Spend / New Customers Acquired.
On its own, CAC only tells you what growth costs — pairing it with Customer
Lifetime Value (CLV) tells you whether that cost is actually worth it. This
calculator does both: enter your CLV (from the
CLV
Calculator if you haven't worked it out yet) and it shows the CLV:CAC
ratio automatically.
Worked examples
Example 1 — a healthy campaign: ₹50,000 spent on ads brings in 25 new customers. CAC = 50,000 / 25 = ₹2,000. If each customer's CLV is ₹8,000, the ratio is 8,000 / 2,000 = 4.0× — healthy (above the 3:1 benchmark).
Example 2 — a losing campaign: ₹1,00,000 spent brings in only 10 new customers. CAC = 1,00,000 / 10 = ₹10,000. If CLV is ₹7,000, the ratio is 7,000 / 10,000 = 0.7× — losing money: each customer is worth less than it cost to acquire them, before even counting cost of goods.
Reading the CLV:CAC ratio bands
This tool uses three bands, a common growth-marketing convention: a ratio of 3:1 or higher is healthy — there's comfortable room for product cost, overhead, and further growth investment. A ratio between 1:1 and 3:1 is tight — technically profitable, but with little margin for error if costs rise or retention drops. A ratio below 1:1 means you're losing money on every new customer, even before other costs are factored in.
Lowering CAC without losing quality
The cheapest acquisition channel most small businesses under-use is word-of-mouth and reviews — a strong Google rating converts browsers into customers at effectively zero marginal spend per customer, which pulls your blended CAC down across every paid channel too.
BizGo's Review Engine automatically asks every customer for a Google review over WhatsApp, growing your reputation (and lowering your effective CAC) with no manual follow-up — see the box above to set it up free.
Frequently Asked Questions
CAC = Marketing Spend / New Customers Acquired. Spending ₹50,000 to acquire 25 new customers gives a CAC of ₹2,000.
A ratio of 3:1 or higher is generally considered healthy — your customers are worth at least 3× what it costs to acquire them. 1:1 to 3:1 is tight (profitable but risky), and below 1:1 means you're losing money on acquisition.
This calculator uses whatever spend figure you enter — for the most accurate CAC, include ad spend, agency/tool fees, and any commissions tied to that specific acquisition effort, not just the ad platform bill.
Leave the CLV field blank — you'll still get your CAC. Use the CLV Calculator to work out lifetime value first, then come back to see your ratio.
Improve targeting and landing page conversion, and lean on low/no-cost channels like referrals and Google reviews, which convert new customers without a per-customer ad spend, pulling your blended CAC down over time.
