Calculate your Customer Acquisition Cost (CAC) and the critical LTV:CAC ratio — the metrics investors and founders use to judge whether growth is sustainable.
How it works
- Enter your total sales and marketing spend over a given period.
- Enter the number of new customers acquired during that same period.
- Optionally input Customer Lifetime Value (LTV) to generate your LTV:CAC ratio.
Frequently asked questions
What should be included in CAC?
All sales and marketing costs: ad spend, salaries, tools, agency fees, and commissions — divided by the customers those efforts acquired in the same period.
What is a good LTV:CAC ratio?
3:1 is the common benchmark. Below 1:1 means you lose money on each customer. Above 5:1 may suggest you are under-investing in growth.
How long until I recover CAC?
Track CAC payback period separately — the months of gross margin needed to recover acquisition cost. Under 12 months is strong for SaaS.