Calculate your customer acquisition cost by channel. Includes blended CAC, per-channel breakdown, LTV:CAC ratio, and payback period analysis.
Total monthly spend across all channels
New customers gained this period (not repeat buyers)
Break out spend and customers by channel to see per-channel CAC
For payback period calculation
For LTV:CAC ratio — calculate your LTV
For profit-adjusted payback period — calculate your margins
What this means: You spend $50.00 to acquire each new customer. With a 4.8x LTV:CAC ratio, each customer generates $240.00 in lifetime value against $50.00 in acquisition cost. At $80.00 AOV and 60% margin, it takes 1.0 orders to recoup the acquisition cost.
Very efficient — often organic/referral heavy
Healthy for most DTC brands
Common when scaling paid ads, watch margins
Expensive — need high AOV or strong LTV to justify
These benchmarks vary wildly by vertical. A $200 CAC is fine for a $500 AOV luxury brand but deadly for a $30 consumable.
Include every dollar spent on acquiring customers: Meta ads, Google ads, TikTok, influencer payments, agency fees, and the portion of your email/SMS platform costs dedicated to acquisition campaigns.
The denominator is new customers only — not repeat buyers. If 100 people purchased this month but 40 were returning customers, your new customer count is 60. Mixing in repeat buyers artificially deflates your CAC.
Total marketing spend divided by new customers equals your blended CAC. This is the customer acquisition cost formula: CAC = Total Marketing Spend / New Customers Acquired.
Calculate CAC per channel to find where your money works hardest. Most brands discover massive variance — email/SMS might be $5 per customer while Meta is $60+. This insight drives smarter budget allocation.
Revenue growth means nothing if each new customer costs more than they're worth. CAC is the reality check — the number that tells you whether growth is profitable or just expensive.
Most brands overspend on one channel. Per-channel CAC reveals where your money works hardest. Spoiler: email and SMS usually have the lowest CAC by a wide margin.
A 3:1 ratio means each customer generates 3x what you spent to get them. Below 1:1, you're losing money on growth. This is the number investors and operators watch most closely.
If a customer buys 5 times instead of once, your effective CAC drops by 80%. Retention marketing — email, SMS, loyalty — is the lever that makes expensive acquisition profitable.
Track blended CAC month over month to catch rising acquisition costs early. If CAC is climbing while revenue stays flat, you need to either optimize ad spend or invest more in retention.
Use your current CAC to forecast how many customers you can acquire with a given budget. If your CAC is $50 and you want 500 new customers, you need $25,000 in marketing spend.
Before doubling down on TikTok or expanding to Pinterest, calculate the per-channel CAC. If it's 3x your blended average with no sign of improving, the channel may not be worth scaling.
When your channel breakdown shows email/SMS CAC at $5 and Meta at $60, the argument for investing in retention marketing writes itself. Show stakeholders the per-channel numbers.
LTV:CAC ratio is one of the first metrics investors ask about. A ratio above 3:1 demonstrates your unit economics work and the business can scale profitably.
Let our team help you implement data-driven strategies that drive real results.