Target CAC Calculator (Free)
Target Cost of Acquisition (CAC) Calculator
Lifetime Value (LTV)
The total revenue a business can expect from a single customer throughout their relationship. If you don't have this number yet or want to calculate it more precisely, feel free to use our LTV Calculator Tool.
Acquisition Allocation (%)
What percentage of each customer's revenue (LTV) do you want to invest in acquiring them? Many businesses target between 10% and 30%, but it depends on your growth and profitability goals. We also have a tool to help you.
What is Target CAC in simple terms?
Your Customer Acquisition Cost (CAC) is how much you spend to acquire a single customer. “Target CAC” is simply the maximum CAC you aim for, based on your profit margins and growth strategy. It’s a key metric because it tells you how much you can spend on marketing and sales to attract new customers without hurting profitability.
How much should you allocate to customer acquisition?
If you allocate too little to acquisition (e.g., below 5% of revenue), you risk slow growth and losing market share to competitors. On the other hand, spending too much (e.g., over 50%) can make your business unsustainable unless you have high-margin products or strong retention.
Most businesses allocate between 10% and 30% of their revenue to customer acquisition. Lower percentages (10-15%) are common for established businesses with strong organic growth, while higher percentages (25-30%) are typical for companies in aggressive growth phases.
Industry and business model also play a role—SaaS and subscription businesses often spend more upfront (expecting long-term revenue), while e-commerce and low-margin businesses need to keep CAC tighter. Startups typically allocate more initially to gain traction, while mature businesses optimize for efficiency.
What’s a good CAC?
There's no universal benchmark, but a common rule of thumb is that your LTV should be at least three times your CAC. In other words, if you spend $1 to acquire a customer, you should be making at least $3 from them over their lifetime.
However, acceptable CAC can vary. Some high-growth or venture-backed companies may be willing to spend more upfront if they anticipate strong lifetime returns.
What are some examples of CAC across different businesses?
CAC varies widely depending on the industry, business model, and marketing approach. Below is a rough guide of how it can range from lower-spend industries to very high-spend ones.
| Business Type | Estimated CAC ($) | Why is the CAC at this level? |
|---|---|---|
| Fast Food (Single Visit) | 1 | These businesses often rely on foot traffic and brand recognition, keeping acquisition costs low. |
| Gas Station (Occasional Customer) | 3 | Low differentiation and infrequent direct marketing. Customers come mostly for convenience. |
| Low-End E-commerce Store | 10 | Basic online ads; competition keeps acquisition costs moderate. |
| Local Coffee Shop (Casual Customer) | 15 | Word-of-mouth helps, but local promotions can raise the cost slightly. |
| Fast Food (Loyal Customer) | 20 | Promotions and loyalty apps can increase marketing spend to retain regulars. |
| Gym Membership (Standard) | 50 | Gyms invest in local advertising, referral programs, and sometimes sign-up incentives. |
| Streaming Subscription | 60 | Heavy digital ad spend and partnerships drive up CAC, but subscriptions can pay off over time. |
| Luxury E-commerce (Occasional Buyer) | 100 | Niche audiences require more specialized (and expensive) marketing efforts. |
| Casual Mobile Game (In-App Purchases) | 150 | Mobile ads can be pricey, and user acquisition has become very competitive. |
| High-End Coffee Shop (Daily Customer) | 200 | Branding, premium location, and high-quality campaigns drive up marketing costs. |
| High-End E-commerce (Loyal Customer) | 300 | Building a loyal following for premium products requires more targeted marketing. |
| Premium Gym Membership | 500 | Upscale facilities and amenities mean a higher marketing budget to reach affluent consumers. |
| B2B SaaS (Small Business Plan) | 1,000 | Longer sales cycles and specialized content marketing add to the cost of acquisition. |
| University Degree Program | 2,500 | Colleges spend heavily on advertising and recruiting to attract each student. |
| Luxury Car Dealership | 5,000 | High-touch marketing, premium showrooms, and branding campaigns inflate CAC. |
| Private Healthcare Membership | 10,000 | Personalized outreach and specialized services require more intensive marketing. |
| Real Estate Brokerage | 20,000 | Significant time and advertising budget for each lead, especially in competitive markets. |
| Wealth Management Service | 50,000 | Long sales cycle, personal consultations, and trust-building ads drive costs up. |
| Luxury Private Jet Charter | 100,000 | Ultra-high-net-worth targeting requires exclusive channels and events. |
| Commercial Real Estate Client | 200,000 | Complex B2B deals and relationship-building efforts come at a high price. |
| Luxury Yacht Dealer | 300,000 | Very high-end clientele; acquisition often involves global marketing and networking. |
| Private Equity Firm | 500,000+ | Extremely specialized acquisitions requiring top-tier networks, exclusive events, and long negotiations. |
How can I reduce my CAC?
Improving the efficiency of your marketing channels is key. Focus on high-ROI strategies: better ad targeting, referral programs, conversion rate optimization, and nurturing leads more effectively.
Another significant lever is brand reputation—when customers come to you organically because of strong reviews and word-of-mouth, your CAC naturally drops. Providing a great customer experience can turn buyers into advocates who bring new customers at zero acquisition cost.