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CAC, or customer acquisition cost, is the average amount a business spends to acquire a new customer. Calculate it by dividing acquisition costs for a defined period by the number of new customers acquired during that same period. The result is useful only when you also define what counts as a customer and which costs are included.
What does customer acquisition cost mean?
Customer acquisition cost (CAC) measures the cost of acquiring new customers. It can be calculated for a whole company, a customer segment, or a marketing channel, provided the costs and customers are counted on the same basis.
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CAC is not automatically the same as advertising spend divided by sales. A broader calculation may include sales and marketing payroll, commissions, bonuses, software, contractors, and other allocated acquisition expenses. There is no single mandatory cost scope, so label the method you use.
How do you calculate CAC?
CAC = acquisition costs during a defined period ÷ new customers acquired during that period
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- Choose a reporting period, such as a month, quarter, or year.
- Define a new customer. For example, decide whether the unit is a first-time buyer, a paying account, or a signed contract.
- Choose the expenses to include, such as advertising, sales and marketing salaries, commissions, software, or contractor costs.
- Add the in-scope acquisition expenses incurred during the period.
- Count new customers acquired in that same period, then divide the costs by that count.
For example, Salesforce illustrates the calculation with $5,000 in monthly sales and marketing costs divided by 100 new customers gained that month: the result is $50 CAC. This is an arithmetic example, not an industry benchmark. See Salesforce’s CAC guide.
Label the result so another person can interpret it, such as “Q2 blended CAC, including allocated sales and marketing costs.” If your sales cycle means customers acquired in a period were influenced by spending in an earlier period, explain how you handle that timing rather than presenting unlike windows as directly comparable.
Which costs should CAC include?
The right scope depends on what you want the number to answer. Ad spend alone can show an advertising cost, but it may understate the expense of acquiring customers across the business. Salesforce calls out indirect costs such as commissions and bonuses; HubSpot’s startup example also includes CRM costs and assigns a value to founder time spent on sales.
- Advertising-only CAC: includes paid media costs and divides them by the customers attributed to that advertising. It is narrower than a fully loaded company CAC.
- Sales and marketing CAC: can include campaign costs, relevant payroll, commissions, bonuses, software, contractors, and other allocated expenses.
- Fully loaded CAC: includes the acquisition expenses your business has decided to allocate, potentially including founder time or shared tools. State your allocation choices.
Use the same scope whenever you compare periods, channels, or teams. The American Marketing Association’s CAC calculator guidance likewise emphasizes documenting both the customer definition and cost scope.
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How is CAC different from CPA and cost per lead?
| Metric | What the denominator counts | What it tells you |
|---|---|---|
| CAC | New customers acquired | Acquisition cost per new customer, using the business’s stated cost scope |
| CPA (cost per action) | A chosen action, such as a purchase, registration, or signup | Cost for a configured conversion action; the action is not necessarily a new paying customer |
| CPL (cost per lead) | Leads generated | Cost per lead, an earlier funnel measure than customer acquisition cost |
Google Ads uses cost per action for a selected conversion action, which may be a purchase, registration, or signup. A business should not treat every CPA as CAC unless the action represents a new customer and the costs and attribution match its CAC method. See Google Ads’ cost-per-action explanation. HubSpot distinguishes CAC from cost per lead by the denominator: customers versus leads. See HubSpot’s CAC overview.
How should you interpret a CAC figure?
CAC alone does not show whether acquiring customers is profitable or sustainable. Compare it with customer lifetime value (LTV), gross margin, retention, and the time needed to recover the acquisition cost. A customer’s revenue is not the same as the margin available to cover CAC and other expenses.
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- Lifetime value: compare the expected value of a customer over the relationship with what it cost to acquire that customer.
- Gross margin: account for the cost of delivering the product or service; revenue alone can make acquisition economics look healthier than they are.
- Retention: customers who leave quickly may not generate enough value to repay acquisition costs.
- Payback timing: consider how long it takes to recover CAC from customer gross profit, particularly when cash flow matters.
There is no universal “good CAC” threshold established for every company. Published benchmarks vary by industry and method. For example, a HubSpot benchmark page updated August 4, 2026, reports combined-average estimates of $239 for B2B SaaS and $791 for real estate, attributing the figures to FirstPageSage material. These are published estimates, not targets that automatically apply to a specific company; definitions, source composition, geography, and cost scope may differ. HubSpot also notes that benchmark calculation is difficult because channel data varies and can be hard to collect. See HubSpot’s CAC benchmark article.
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How can you track CAC?
A spreadsheet is enough for the basic calculation if your expense records and customer counts are reliable. A CRM or analytics system can help consolidate customer and channel information, but it does not remove the need to define the metric.
- Record the period, customer definition, included expenses, and attribution method alongside each result.
- Separate blended company CAC from channel, campaign, or segment calculations.
- Keep source records for the expense total and customer count so the calculation can be checked.
- Use the same definitions for trend comparisons, or clearly note when the method changes.
HubSpot describes CRM reporting for tracking CAC across touchpoints, while Salesforce discusses connecting customer data across business functions. These are optional tools; consistent accounting and customer data matter more than the software used. See HubSpot’s CAC guide and Salesforce’s guide.
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