Customer Acquisition Cost (CAC) Calculator

What a customer costs you across marketing, sales and fees — and your payback period.

Your numbers

Advertising spend$Agency / software fees$Sales & estimating payroll (burdened)$Other acquisition costs (events, print, referral fees)$Leads generatedQualified leadsNew customers closedAverage first sale$Gross margin (%)%

Your result

Total acquisition spend: $19,700
Cost per lead: $140.71
Cost per qualified lead: $205.21
Lead qualification rate: 68.6%
Close rate on qualified leads: 35.4%
Customer acquisition cost (CAC): $579.41
CAC excluding sales payroll: $373.53
CAC as % of first sale: 32.2%
Gross profit per new customer: $756.00
Gross profit after CAC: $176.59
Purchases needed to pay back CACUnder 1.0 means the first job pays for the acquisition.: 0.77

$579 to acquire a customer worth $756 in first-job gross profit

CAC is 32% of the first sale, so you're relying on repeat business to make the economics work. That's viable if retention is real — check your lifetime value before you increase spend.

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What this number actually tells you

Customer acquisition cost is the total you spend to land one new customer — advertising, agency fees, sales payroll, referral fees and all. Not cost per click. Not cost per lead. Cost per customer who actually paid you.

CAC is where marketing and sales meet, and it's why close rate matters as much as ad spend. If your cost per qualified lead is $120 and you close a third of them, your CAC is $360. Move the close rate to 40% and CAC drops to $300 without spending another dollar.

The number to judge it against is gross profit per customer, not revenue. If CAC exceeds first-job gross profit, you're buying customers on credit and betting on repeat business.

How the math works

01Total acquisition spend = ad spend + agency and software fees + burdened sales/estimating payroll + other acquisition costs.
02Cost per lead = total spend ÷ leads. Cost per qualified lead = total spend ÷ qualified leads.
03CAC = total spend ÷ new customers closed.
04Gross profit per customer = average first sale × gross margin %.
05CAC payback (purchases) = CAC ÷ gross profit per customer.

What to do with the answer

Calculate CAC by channel. The blended number hides both your best channel and your worst.
Include sales payroll. Estimating time is an acquisition cost, and in trade businesses it's often the largest one.
Attack close rate before ad spend. It's free, it's faster, and it improves every channel at once.
Keep CAC under 20–25% of the first sale in a transactional business; higher is acceptable only where repeat revenue is proven.

Want someone to read these numbers with you?

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Questions owners ask about this

What is a good customer acquisition cost?

It depends on lifetime value, but a practical rule for service businesses is CAC below 20–25% of the first job's revenue, and an LTV:CAC ratio of at least 3:1. If CAC exceeds first-job gross profit, growth consumes cash.

Should sales payroll be included in CAC?

Yes. Anyone whose time is spent generating or closing work — estimators, inside sales, the owner selling — is an acquisition cost. Excluding them is the most common reason reported CAC looks better than reality.

How do I lower CAC without cutting marketing?

Improve speed to lead, follow-up persistence and close rate; get more from existing customers and referrals; and cut the channels producing unqualified leads. Close rate is the highest-leverage lever because it costs nothing to change.

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