How to Calculate CAC: Customer Acquisition Cost Formula
Summary
CAC = Total sales and marketing cost ÷ New customers acquired in the same period. It is the average cost to win one customer. A SaaS company that spent $374,500 on sales and marketing in Q2 and won 142 new customers has a blended CAC of $2,637.32.
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Customer acquisition cost (CAC) formula
CAC = (Marketing costs + Sales costs) ÷ Number of new customers acquired- Marketing costs: Paid media, marketing salaries, agencies, content, events and marketing tools for the period.
- Sales costs: Sales salaries, commissions, bonuses and sales tools for the period.
- New customers: Customers who became paying for the first time in the period. Exclude reactivations unless you deliberately include them.
How to calculate customer acquisition cost (CAC) in Excel and Google Sheets
Excel, using the cells in the worked example below:
=SUM(B2:B6)/B7Worked example
A B2B SaaS company selling inventory software to mid-size retailers calculates CAC for Q2 to set next year's marketing budget.
| Item | Q2 amount |
|---|---|
| Paid media | $84,000 |
| Marketing salaries | $96,000 |
| Sales salaries and commissions | $158,000 |
| Sales and marketing tools | $14,500 |
| Events and sponsorships | $22,000 |
| New customers acquired | 142 |
- Total sales and marketing cost = 84,000 + 96,000 + 158,000 + 14,500 + 22,000 = $374,500.
- Blended CAC = 374,500 ÷ 142 = $2,637.32 per new customer.
- Paid-media-only CAC is a different number: if 38 customers came from paid campaigns, paid CAC = 84,000 ÷ 38 = $2,210.53, but that excludes the salaries needed to close them.
- Fully loaded is the version to compare with lifetime value; channel CAC is for comparing channels.
Result: $2,637.32 blended CAC
How to interpret customer acquisition cost (CAC)
CAC is only meaningful next to what a customer is worth. Compare it with customer lifetime value (a widely cited rule of thumb is LTV at least about three times CAC) and with payback period (how many months of gross profit it takes to recover CAC). Rising CAC isn't automatically bad if deal sizes rise too. Long sales cycles distort quarterly CAC, because spend this quarter wins customers next quarter, so many B2B teams lag costs by one quarter or use rolling 12-month figures.
Common mistakes
- Counting only ad spend. Paid-media CAC can be a fraction of fully loaded CAC once salaries and tools are included.
- Mismatching periods in long sales cycles. Lag spend by your typical cycle or use trailing twelve months.
- Including customers who came from existing-customer expansion or reactivation as 'new'.
- Comparing CAC across segments with very different deal sizes without also comparing their LTV or ARPA.
Calculate customer acquisition cost (CAC) with Better Analyst
Connect your data or upload a spreadsheet, then ask in plain English. Better Analyst writes and runs the calculation and shows the steps, so you can check the number.
- “Calculate blended and paid CAC by quarter for the last two years.”
- “Break down CAC by acquisition channel using first-touch source from our CRM export.”
- “Compare CAC with first-year gross profit per customer for each segment.”
Usually calculated from: Google Sheets, Google BigQuery, Snowflake, PostgreSQL, 
Airtable, Google Analytics.
Further reading
Frequently asked questions
What costs are included in CAC?
What is the difference between CAC and CPA?
How do I calculate CAC in Excel?
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