Free tool
Customer Acquisition Cost (CAC) Calculator
Work out what each new customer costs you — then check it against lifetime value and payback time.
CAC
$100
LTV : CAC
8.0:1
Payback
2.5 months
CAC only means something next to CLV
A $100 CAC is great if customers are worth $800 and terrible if they are worth $90. Always read acquisition cost against lifetime value — the ratio, not the raw number, tells you whether growth is profitable.
Payback governs how fast you can grow
The sooner each customer repays their acquisition cost, the sooner you can recycle that cash into more growth. Shortening payback is often as valuable as lowering CAC outright. Pug ties the events behind acquisition and activation together so you can attribute both.
Frequently asked questions
- How do you calculate customer acquisition cost?
- CAC = total sales & marketing spend ÷ new customers acquired in the same period. If you spent $20,000 and gained 200 customers, your CAC is $100.
- What is a good LTV:CAC ratio?
- Roughly 3:1 or higher is the common benchmark — you earn at least three times what you spend to acquire. Below 1:1 you lose money on every customer; far above 3:1 you may be under-investing in growth.
- What is CAC payback?
- The number of months of gross profit per customer it takes to recover the acquisition cost. Shorter payback means you can reinvest in growth faster.
Put it to work with Pug.
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