CAC Calculator
Calculate your customer acquisition cost, payback period and LTV:CAC ratio. Free, no signup required.
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Total amount spent on acquisition over the period (ads, creative, tools).
Number of unique customers who placed their first order over the period.
Average amount per order, excluding taxes and shipping.
Average number of orders per customer per year.
How many years a customer stays active on average.
Average gross margin after COGS, excluding ad spend.
Average cost to acquire a new customer.
Net profit generated per customer over their lifetime.
How many dollars of profit for every dollar invested in acquisition.
Number of orders needed to recoup the CAC.
You're in the fragile zone. Optimize retention and conversion before increasing budgets.
Why CAC alone is not enough
CAC (Customer Acquisition Cost) measures how much you spend to acquire a new customer. On its own, it means nothing: a $50 CAC can be excellent or catastrophic depending on your LTV. The real indicator to track is the LTV:CAC ratio and the payback period, the speed at which you recoup your investment.
$10,000 ad spend / 200 customers = $50 CAC
$150 net LTV / $50 CAC = ratio of 3, healthy
$50 / ($80 × 30%) = 2.1 orders to recoup CAC
What LTV:CAC ratio to aim for
The LTV:CAC ratio is the most reliable indicator to drive your acquisition profitability.
| LTV:CAC ratio | Diagnosis | Recommended action |
|---|---|---|
| < 1:1 | Every customer costs more than they earn | Urgent stop, full acquisition audit |
| 1:1 to 2:1 | Unprofitable medium-term | Optimize conversion and retention before scaling |
| 3:1 | Healthy ratio, e-commerce standard | Continue, look to scale intelligently |
| 4:1 and above | Excellent, growth potential | Increase acquisition budgets |
| > 6:1 | Likely underinvesting | Scale more aggressively to capture market |
Four levers to reduce your CAC
CAC moves on four dimensions. Before cutting budgets, test these levers.
Improve your conversion rate
Product page, checkout, speed, trust signals. Moving from 2% to 3% conversion rate mechanically divides your CAC by 1.5.
Diversify acquisition channels
Meta, Google, TikTok, SEO, partnerships, affiliation. Depending on a single channel exposes you to uncontrollable CPC hikes.
Invest in organic
SEO, content, social media, word of mouth. Organic CAC is nearly zero and improves your blended CAC over time.
Optimize creatives and audiences
Test 20 creatives per month, cut unprofitable audiences, reallocate budget to winners.
Frequently asked questions
What is CAC in e-commerce?+
CAC (Customer Acquisition Cost) is the average cost to acquire a new customer. It's calculated by dividing total marketing spend by the number of new customers acquired over the period.
What's a good CAC?+
There's no universal good CAC. A good CAC is one that allows at least a 3:1 LTV:CAC ratio. A $50 CAC with $150 net LTV is healthy, with $80 net LTV it's toxic.
What's a good LTV:CAC ratio?+
The e-commerce standard is 3:1. Below that, you're fragile. Above 4:1 you have room to scale. Above 6:1 you're likely underinvesting in acquisition.
What is payback period?+
Payback period is the number of orders (or months) needed to recoup the CAC via gross margin. A 1-order payback is excellent, above 3 orders you have a cash flow problem.
Does CAC include organic costs?+
It depends on the calculation. Paid CAC only includes advertising spend. Blended CAC includes all spend (ads, SEO, tools, marketing salaries). This calculator uses the total marketing spend you enter.
Related pages
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Track your CAC per channel in real time
Fullmetrix calculates CAC per channel, campaign and cohort on your PrestaShop, WooCommerce or Shopify store, with automatic attribution.
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