Customer acquisition cost (CAC) is the total amount a brand spends on sales and marketing to win one new customer over a set period. It’s the definitive metric for teams connecting marketing spend directly to revenue.​​ 

How to calculate customer acquisition cost​​ 

The Corporate Finance Institute describes CAC as “calculated as sales and marketing expenses divided by the number of new customers.” Here’s the CAC formula:​​ 

CAC = total sales and marketing costs ÷ new customers acquired​​ 

Your costs include ad spend, content production, salaries, tools and overhead. Pick one time period and use it for both numbers.​​ 

For example: If your team spends $10,000 on sales and marketing in a quarter and gains 100 new customers, your CAC is $10,000 ÷ 100 = $100.​​ 

Your result is only as good as your customer count. Set up conversion tracking to measure exactly how many new customers each platform and campaign generates.​​ 

Why customer acquisition cost matters​​ 

Acquiring customers is more expensive than ever. According to SimplicityDX data reported by HubSpot, customer acquisition costs “have surged more than 222% over the past eight years.” When every new customer costs more, efficiency decides who grows.​​ 

CAC tells half the story. Pair it with customer lifetime value (LTV), the total revenue a customer brings in over time, to get your LTV:CAC ratio.​​ 

David Skok’s SaaS Metrics 2.0 guide puts it this way: “The best SaaS businesses have a LTV to CAC ratio that is higher than 3.” That’s why 3:1 is a commonly cited benchmark for a good customer acquisition cost. Because this benchmark varies by business model, a low-margin e-commerce brand and a subscription software brand require vastly different targets.​​ 

Social media teams hold a powerful lever to reduce customer acquisition costs. A 2025 First Page Sage analysis of B2C industries found “organic CACs are nearly always lower than paid.” Organic channels like organic social and SEO avoid paying for each new visitor the way paid channels do, which pulls your blended CAC down.​​ 

But organic social isn’t free. Content creation, tools and team time all belong in the formula. Track the full picture to decisively prove social media ROI to leadership.​​ 

Customer acquisition cost vs. cost per acquisition​​ 

Don’t confuse CAC with cost per acquisition (CPA). CPA is the cost of one conversion, like a sign-up, lead or sale, from a single campaign or ad. CPA isolates media spend.​​ 

CAC is the fully loaded cost of winning a paying customer across all your sales and marketing. CPA measures a campaign. CAC measures your whole acquisition engine.​​ 

Then there’s cost per click (CPC)—the exact price you pay for an ad click before a conversion happens. Track all three. A cheap click never guarantees a profitable customer.​​ 

Pinpoint which social campaigns drive new customers using Sprout Social’s intuitive analytics tools. Start a free trial and tie your social results to CAC.​​