Should salaries be included in customer acquisition cost?

In a fully loaded figure, yes: the people who plan, produce and run the campaigns are part of what acquiring a customer costs, and excluding them is the most common reason a reported number looks impressively low. The media-only version is still useful for judging channel efficiency day to day. The important thing is to label which one you are quoting, because the two often differ by more than half.

What is the difference between blended CAC and paid CAC?

Blended CAC divides all marketing cost by all new customers, including the ones who arrived through word of mouth, organic search or direct traffic. Paid CAC divides media spend by only the customers attributed to paid channels. Blended is always lower, and it improves whenever organic acquisition grows, so it can fall while paid acquisition is getting steadily more expensive.

What is a good ratio of lifetime value to acquisition cost?

Three to one is the figure usually quoted in subscription software, and it assumes margin-based lifetime value against fully loaded acquisition cost. The headroom exists to absorb the cost of serving customers, company overheads and a forecast that turns out optimistic. Computed on revenue lifetime value and media-only acquisition cost, the same business can show four to one while losing money on every customer.

How do I attribute customers to paid when several channels touched them?

There is no clean answer, only a choice you should make once and apply consistently. Last non-direct click is the common default and it undercredits everything that happens early. Data-driven or position-based models spread the credit more sensibly but are harder to reproduce. Whichever you use, run the sensitivity: if your conclusion flips between last click and first click, the decision needs a holdout test rather than a better model.

Yes. This tool does its work in your browser, so whatever you type, paste or upload stays on your device. Nothing is sent to our servers, which is also why it keeps working if you go offline after the page has loaded.

Yes. Every tool here is free with no account, no credit card and no usage cap. They exist so that the people who need our scheduling product find us, which only works if the tools are genuinely useful on their own.

Do I need an account?

No. Open the page and use it. An account is only for OctoSpark itself, where you plan, schedule and publish a whole calendar rather than fixing one post at a time.

Can I use the output commercially?

Yes. Anything you produce here is yours, including for client and commercial work. We claim no rights over it and we do not watermark it.

OctoSpark

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Customer acquisition cost calculator

Calculate customer acquisition cost three ways at once: media only, fully loaded with salaries and tools, and blended. Says which costs each one includes.

Solve for

Your numbers

Paid media spend

What the ad platforms charged in the period, including agency media fees if they are a percentage of spend. Enter it in your own currency.

Customers from paid

New paying customers you credit to the paid channels, using whichever attribution model you have agreed. Enter it a whole number.

Paid CAC, media only

$200.00

Media alone cost $200.00 per customer. Nobody was paid to make those ads in this version of the number.

The sum this ran

Paid CAC, media only = Paid media spend ÷ Customers from paid

Everything here runs in your browser. Nothing you type is uploaded, which matters when the inputs are spend, revenue and margin.

Three CACs, and yours is probably the flattering one

Customer acquisition cost has no standard definition, and the variation between the common ones is not marginal. On the same business the media-only number and the blended number can differ by a factor of two, which is enough to reverse a decision about whether to keep spending.

Paid CAC divides media spend by the customers that media bought. Ad platforms report a version of this, and it is the number an agency prefers to present.
Fully loaded CAC adds the salaries, retainers, contractors, creative production and software that produced the campaigns. Investors and finance teams mean this one, and it is usually considerably higher.
Blended CAC divides total marketing cost by every new customer including organic and word of mouth. It is the lowest of the three and it falls whenever your reputation improves, which is not the same as paid acquisition getting cheaper.
A ratio of lifetime value to acquisition cost is only meaningful when both sides are stated: margin lifetime value against fully loaded acquisition cost is the conservative pairing, and revenue lifetime value against paid acquisition cost is the one that hides problems.

The exact sums this page runs

Three divisions from four inputs, shown side by side deliberately. Seeing the spread between them on your own numbers is more persuasive than any argument about which definition is correct.

Total marketing cost = Paid media spend + Marketing salaries and tools. Media plus the people and tools that produced it. Whether this belongs in CAC is the argument the metric is famous for.
All new customers = Customers from paid + Customers from everything else. Everybody who started paying in the period, however they found you.
Paid CAC, media only = Paid media spend ÷ Customers from paid. Media over the customers it bought. The flattering version, and the one ad platforms report.
Fully loaded CAC = Total marketing cost ÷ Customers from paid. Media plus salaries, tools and production, over the paid customers. The version an investor means.
Blended CAC = Total marketing cost ÷ All new customers. Total marketing cost over every new customer, paid or not. The lowest of the three and the easiest to quote misleadingly.

Deciding what belongs in the cost line

The arguments about acquisition cost are really arguments about the numerator. These are the calls to make explicitly, rather than by whichever column happened to be in the spreadsheet.

Include marketing and sales payroll for anybody whose work is acquiring customers. Excluding them is the single largest reason a reported figure is too low.
Include agency retainers, freelancers, creative production, and the software that exists to run acquisition. Exclude tooling that serves the whole company.
Discounts and introductory offers are an acquisition cost, not a revenue reduction, if they exist to convert a first purchase. Treat them consistently and say which way you went.
Exclude the cost of serving the customer after they arrive. Fulfilment, support and hosting belong in gross margin, and counting them twice makes every downstream ratio wrong.
Exclude spend aimed at existing customers. Retention and upsell campaigns are not acquisition, and leaving them in the numerator inflates the cost of new business.

The timing error that quietly doubles your number

Dividing this month’s spend by this month’s customers assumes that money and customers arrive in the same period. For anything with a considered purchase, they do not, and the mismatch is largest exactly when you are changing budget.

If your sales cycle is sixty days, the customers who signed this month came largely from spend two months ago. Dividing by current spend understates cost when budget is falling and overstates it when budget is rising.
Align the periods by lagging the customer count by your median time to purchase, or by measuring on a cohort basis, where customers acquired in a month are matched to the spend that reached them.
Brand and content spend has a longer and vaguer lag still. Loading it into a monthly acquisition cost makes the number volatile without making it more accurate.
Review the figure quarterly rather than weekly. Monthly acquisition cost on small volumes is dominated by how many customers happened to close before the end of the month.

The rest of the job

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Frequently asked questions

How this tool works, what it cannot do, and what happens to what you put into it.

Should salaries be included in customer acquisition cost?
In a fully loaded figure, yes: the people who plan, produce and run the campaigns are part of what acquiring a customer costs, and excluding them is the most common reason a reported number looks impressively low. The media-only version is still useful for judging channel efficiency day to day. The important thing is to label which one you are quoting, because the two often differ by more than half.
What is the difference between blended CAC and paid CAC?
Blended CAC divides all marketing cost by all new customers, including the ones who arrived through word of mouth, organic search or direct traffic. Paid CAC divides media spend by only the customers attributed to paid channels. Blended is always lower, and it improves whenever organic acquisition grows, so it can fall while paid acquisition is getting steadily more expensive.
What is a good ratio of lifetime value to acquisition cost?
Three to one is the figure usually quoted in subscription software, and it assumes margin-based lifetime value against fully loaded acquisition cost. The headroom exists to absorb the cost of serving customers, company overheads and a forecast that turns out optimistic. Computed on revenue lifetime value and media-only acquisition cost, the same business can show four to one while losing money on every customer.
How do I attribute customers to paid when several channels touched them?
There is no clean answer, only a choice you should make once and apply consistently. Last non-direct click is the common default and it undercredits everything that happens early. Data-driven or position-based models spread the credit more sensibly but are harder to reproduce. Whichever you use, run the sensitivity: if your conclusion flips between last click and first click, the decision needs a holdout test rather than a better model.
Is my data private?
Yes. This tool does its work in your browser, so whatever you type, paste or upload stays on your device. Nothing is sent to our servers, which is also why it keeps working if you go offline after the page has loaded.
Is this really free?
Yes. Every tool here is free with no account, no credit card and no usage cap. They exist so that the people who need our scheduling product find us, which only works if the tools are genuinely useful on their own.
Do I need an account?
No. Open the page and use it. An account is only for OctoSpark itself, where you plan, schedule and publish a whole calendar rather than fixing one post at a time.
Can I use the output commercially?
Yes. Anything you produce here is yours, including for client and commercial work. We claim no rights over it and we do not watermark it.