Free tool
Customer acquisition cost calculator
What you spent, the conversions it produced and the customers who actually paid, into a cost per acquisition and a customer acquisition cost. Then the figure the two divisions never give you: how many months of gross profit each new customer takes to pay back what it cost to win them. Nothing you type leaves your browser.
Customers won from search carry no bill per click, which is why our SEO services change this figure over time rather than for one month.
What a customer costs to win
- Cost per acquisition
- 40.00
- Customer acquisition cost
- 200.00
- Payback
- 3.1 months
- First-year return on the spend
- 3.9x
Two divisions, and the figure that matters
Spend divided by conversions is the cost per acquisition. Spend divided by paying customers is the customer acquisition cost. Every calculator on this subject stops at one of those and compares it with an average by industry, and the averages disagree with each other because nobody counts spend or conversions the same way twice. Both figures are on this page, and the customer one is used for what comes next, because an enquiry that never buys costs money and returns none.
What comes next is the payback: the acquisition cost divided by the gross profit a customer brings each month. That is the number an owner can feel. A cost that pays back in three months is cheap for almost any business; one that takes twenty needs customers who stay for years and cash to front in the meantime. The first-year return is the same figure the other way round, twelve months of gross profit against what the customer cost, and it is the one to hold against a marketing invoice.
The spend should be all of it. Media only gives a flattering number; add the agency, the listings, the software and the share of wages that went on winning work rather than doing it, and the figure becomes one you can pay a wage with. If you only have the media spend, use it and say so when you quote the result.
Getting the monthly gross profit per customer
For a subscription or a retainer it is the monthly fee less what it costs to deliver. For a business paid per job, take a typical customer's jobs over a year, less the cost of doing them, and divide by twelve; a customer who buys twice a year at a healthy margin has a real monthly figure even though no month looks like it. Use the typical customer rather than the best one, and measure it from the invoices rather than from memory, because a generous figure here shortens the payback on paper and nowhere else.
The figures on either side of this one
The customer lifetime value calculator takes the payback past the first year, to what a customer is worth over their whole stay and the most you can spend to win one. The cost per lead calculator looks at one channel at a time and says what a lead can cost before its customers stop covering it, and the break-even calculator says how many customers a month cover the fixed costs.
Questions about acquisition cost
What is the difference between CPA and CAC?
Cost per acquisition is the spend divided by whatever you counted as a conversion: an enquiry, a sign-up, a booking, a trial. Customer acquisition cost is the spend divided by the new customers who actually paid. They are the same number only when every conversion becomes a customer, which is rare, so the page shows both and uses the customer figure for the payback.
What should I count as spend?
Everything that went into winning those customers in the period: the advertising bill, the agency or freelancer, the directory listings, the software, and the share of salaries spent on marketing rather than delivery. Leaving the people out gives a flattering number that nobody can pay a wage with. If you only have the media spend, use it and say so when you quote the result.
What is a good customer acquisition cost?
There is no good figure in general, and the averages published by industry disagree with one another. The only comparison that means anything is against what a customer returns: how many months of gross profit it takes to pay the cost back, and how that sits with the cash you can afford to front. A cost that pays back in three months is cheap for almost anyone; one that takes two years needs customers who stay for five.
Why gross profit rather than revenue?
Because the advert is paid for out of what is left after delivering the work, not out of the invoice total. A customer paying a large amount at a thin margin pays the acquisition cost back more slowly than one paying less at a fat one. The margin is the figure most calculators leave out, and it is the one that changes the answer.
Is anything I type here sent anywhere?
No. Everything happens in your browser. There is no form submission, no analytics event and no network request of any kind, which you can confirm in your browser’s network tab.
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