Marketing
Customer acquisition cost
Total the period's sales and marketing spend, then divide by the customers who actually paid in that period. Omitting sales spend is the standard error and understates the result by the whole sales cost per customer.
The Formula
CAC = (Marketing spend + Sales spend) / New customers
Total the period's sales and marketing spend, then divide by the customers who actually paid in that period. Omitting sales spend is the standard error and understates the result by the whole sales cost per customer.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| Marketing spend | All demand-generation cost for the period | currency | Paid media, content, events, tools and agency fees. Here 50000. |
| Sales spend | Cost of the selling function for the period | currency | Salaries, commission and sales tooling. Here 30000, the half most often dropped. |
| New customers | Paying customers won in the period | count | Converted and invoiced. Trials and signups do not count. Here 250. |
What Each Symbol Means
Marketing spendcurrency
All demand-generation cost for the period
Paid media, content, events, tools and agency fees. Here 50000.
Sales spendcurrency
Cost of the selling function for the period
Salaries, commission and sales tooling. Here 30000, the half most often dropped.
New customerscount
Paying customers won in the period
Converted and invoiced. Trials and signups do not count. Here 250.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate customer acquisition cost page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Customer Acquisition Cost, filed under Business. Every number the guide produces comes from substituting into this one line.