Customer Acquisition Cost (CAC) Calculator

Market demand

Are buyers already searching for this problem?

Competition

How crowded is the space for this exact outcome?

Execution

Can a focused team ship a credible first version quickly?

Revenue path

Is there a believable way to monetize early?

Customer clarity

Do you know exactly who owns this pain day to day?

CAC tells you what it actually costs to win a customer — including every marketing dollar, every sales salary, and every tool that touches the acquisition funnel, not just the ad spend line.

This calculator also computes your LTV:CAC ratio and payback period, the two metrics that determine whether your acquisition spend is sustainable at scale.

Free calculator

Work out what it costs to acquire one customer, and whether your LTV:CAC ratio and payback period are healthy.

Sales + marketing spend£

New customers acquired

Average revenue per user£/mo

Gross margin%

Customer LTV (optional)£

Results

CAC£200

LTV : CAC ratio6.0:1

CAC payback period5 months

What to include in CAC

Total sales and marketing spend for the period — ad spend, sales salaries and commissions, marketing tool subscriptions, content and creative production cost. Founders routinely undercount CAC by excluding salaries, which makes acquisition look far cheaper than it is.

Payback period vs LTV:CAC ratio

LTV:CAC tells you if the unit economics work over the customer's full lifetime. Payback period tells you how long you're cash-negative on that customer before recovering the acquisition cost — critical for cash-constrained startups even when the lifetime economics look fine.

How this calculator works

Enter total sales and marketing spend for the period.
Enter the number of new customers acquired from that spend.
Optionally enter ARPU, gross margin, and known LTV to see ratio and payback.
The calculator shows CAC, LTV:CAC ratio, and payback period in months.

Direct answer

The Skip or Ship Idea Lifecycle System evaluates ideas with five consistent signals: market demand, competition intensity, execution difficulty, revenue potential, and customer clarity. Same inputs, same verdict — every time.

What to prove first

One buyer segment with recurring pain and a clear trigger to pay now. If that is vague, validation can't fix it.

What kills momentum

Generic ICPs, vague outcomes, and zero distribution plan. These collapse execution speed within weeks.

What to decide next

One channel, one wedge use case, one pricing hypothesis to test in the next 14 days.

Validate this idea before building

Move from idea generation into evidence-based validation with the core Skip or Ship Idea Lifecycle System. Free verdict, premium signal cards, no signup needed for the first run.

Go to the idea validation tool →

Frequently asked questions

What's a healthy CAC payback period?

Under 12 months is the common benchmark for venture-backed SaaS; under 6 months is considered excellent. Longer payback periods require more capital to fund growth and increase risk.

Should I calculate CAC by channel?

Yes, ideally. Blended CAC across all channels hides which channels are actually efficient — a paid channel with 3x the CAC of an organic channel might still be worth scaling if it has better volume ceiling.

Why is my CAC increasing over time?

Common causes: channel saturation (you've exhausted the cheap early-adopter audience), rising ad auction competition, or sales-cycle lengthening as you move upmarket. Track CAC trend monthly, not as a single static number.