Free tool
Work out what it costs to acquire a customer, and whether that cost is sustainable against their lifetime value.
Add LTV to see your LTV:CAC ratio.
Customer acquisition cost
-
LTV : CAC ratio
-
Enter spend and new customers to calculate.
Customer acquisition cost is the total sales and marketing spend it takes to win one new
customer. The formula is CAC = total spend / new customers acquired. If you spent
$12,000 to acquire 150 customers, your CAC is $80.
A CAC is neither good nor bad on its own; it only means something next to what a customer is worth. That is the LTV:CAC ratio, lifetime value divided by acquisition cost. A common rule of thumb is 3:1: a customer should be worth about three times what it cost to acquire them. Below 1:1 you lose money on every customer; far above 3:1 you may be under-investing in growth. Size up lifetime value with the LTV calculator.
CAC falls apart if you cannot tell which spend produced which customers. When the browser pixel misses conversions, campaigns look more expensive than they are and you cut the wrong ones. Trakt ties every customer back to the campaign that won them and reports it to the ad platform, so your CAC by channel reflects reality. See how it works.
Connect a store, run Trakt in shadow mode, and compare it against your ad account before you change a thing.