CAC equals total sales and marketing cost in a period divided by new customers acquired in that period. $120,000 of spend, salaries, and tools producing 800 new customers is a $150 CAC. Paid CAC uses media spend only; fully loaded CAC includes people and tools.
What moves it
CAC is compared to lifetime value; a ratio of 3:1 or better is the common rule of thumb, and payback period (CAC divided by monthly contribution per customer) matters more for cash-constrained businesses. CAC by channel requires an attribution decision; blended CAC does not.
Run your own numbers with the CAC to LTV calculator.
Cite this page:
Agency Echelon. "How do you calculate customer acquisition cost?" Agency Echelon Reference, reviewed September 2026. https://agencyechelon.com/reference/questions/how-to-calculate-cac/