CAC Calculator

What this tells you

Customer acquisition cost is the fully loaded price of winning one new customer. CAC payback is how long that customer takes to earn it back in gross profit. The formulas are:

CAC = Sales and Marketing Spend / New Customers, and Payback = CAC / (MRR x Gross Margin)

CAC alone is a vanity number. Pair it with payback and you learn how long your cash is tied up before a customer turns profitable.

Why payback beats the LTV:CAC ratio

Most teams obsess over the LTV:CAC ratio. The problem is that LTV leans on a churn assumption and a discount rate, so it can be tuned to say almost anything. Payback period is harder to fudge. It answers a concrete question: how many months until this customer has paid back what you spent to win them.

For B2B SaaS between $100M and $1B ARR, payback exposes cash-flow reality that the ratio hides. Two companies can post the same LTV:CAC and run completely different businesses. One recovers CAC in 8 months and self-funds growth. The other takes 30 months, burns cash on every deal, and needs outside capital to scale. Same ratio, opposite outcomes. Gross margin is the lever people forget here. Improving margin shortens payback without touching spend or price, because every retained dollar comes back faster.

ORM's take: blended CAC hides the decision

This calculator gives you blended CAC, which averages every channel and segment into one number. That average is exactly where the wrong decisions get made. Paid search, outbound, partner, and inbound rarely share a CAC or a payback, and funding them as if they do quietly subsidizes your worst channel with the returns of your best.

ORM's custom prescriptive models break CAC and payback down by channel, segment, and cohort, then prescribe where the next acquisition dollar earns back fastest. The blended number is the diagnostic. The prescription is which channels to fund, hold, or cut.

Common questions

How do you calculate customer acquisition cost?

Divide total sales and marketing spend for a period by the number of new customers acquired in that period. The spend should be fully loaded, including salaries, tooling and overhead, because a CAC built on ad spend alone understates the real cost by a wide margin.

Should CAC include salaries?

Yes. Fully loaded CAC includes sales and marketing headcount, tools, and program spend. A CAC that counts only campaign budget is not comparable to anyone else's and will not survive a diligence conversation.

What is the difference between blended CAC and new-logo CAC?

Blended CAC divides all spend by all new customers including those acquired organically. New-logo CAC isolates paid acquisition. Blended looks better and tells you less, because it hides how much a genuinely new customer costs to win.

How does CAC relate to LTV?

LTV divided by CAC gives the payback multiple most B2B SaaS teams manage to. The ratio matters less than the payback period, since a healthy multiple that takes three years to realise still consumes cash the business may not have.

Why is CAC rising for most B2B SaaS companies?

Longer sales cycles are the mechanical cause. Cycles have lengthened 22% since 2022, which means more sales effort per closed deal at the same headcount, and effort per deal is what CAC measures.