How do you calculate customer acquisition cost for an ecommerce brand?
The short answer
Customer acquisition cost (CAC) is what you spend to win one new customer: CAC = acquisition spend in a period / first-time customers in the same period. A brand that spends £60,000 on paid acquisition and wins 2,000 first-time customers has a blended CAC of £30; adding £10,000 of agency, creative and tool costs gives a fully loaded CAC of £35. Count only first-time customers, leave out spend on existing customers, and compare CAC with the margin a customer brings in, starting with their first order. Use the calculator below with your own numbers.
Why does customer acquisition cost matter?
Because it is the price of every new customer, and many DTC brands pay it before they have earned anything back. In the worked example below, a brand pays £30 in paid media to acquire a customer whose first order brings in £24 of margin, so it is £6 down on every new customer until they order again, and £11 down once agency, creative and tool costs are counted. Everboost looks at CAC alongside what each customer is worth, because the more each customer is worth, the more you can afford to spend winning the next one.
Calculate your customer acquisition cost
Use one period, a month or a quarter, for every number. Every field starts empty, and the note under each one says where the number usually comes from. The calculator gives blended figures: spend divided by every first-time customer, however they found you.
Customer acquisition cost calculator
The calculator divides spend by first-time customers in the same period. Customers can buy weeks after first seeing an ad, so if spend jumps or drops sharply between months, compare quarters instead.
What is customer acquisition cost?
Customer acquisition cost is what a brand spends to win one new customer. For a DTC brand, CAC is acquisition spend in a period divided by the number of first-time customers in that period. It answers a different question from what an ad platform reports, because ad platforms count conversions, and a conversion can be a customer who has bought before. Everboost uses the brand’s own count of first-time customers, which is also the starting point for every repeat-rate figure.
How do you calculate customer acquisition cost?
CAC = acquisition spend in the period / first-time customers in the period
Worked example, as of November 2026, for one quarter:
| Step | Calculation | Result |
|---|---|---|
| Paid acquisition spend | ads, affiliate and influencer fees | £60,000 |
| Other acquisition costs | agency fees, creative, tools | £10,000 |
| First-time customers | first-ever orders only | 2,000 |
| Blended CAC | £60,000 / 2,000 | £30 |
| Fully loaded CAC | £70,000 / 2,000 | £35 |
| First-order margin | £40 first order x 60% margin | £24 |
| Share of blended CAC the first order covers | £24 / £30 | 80% |
| Share of fully loaded CAC the first order covers | £24 / £35 | 69% |
What should you include in CAC?
| Include | Leave out |
|---|---|
| Ad spend aimed at new customers | Email and SMS to existing customers |
| Affiliate and influencer fees | Retargeting of past purchasers |
| Acquisition agency fees (fully loaded) | Customer service and fulfilment |
| Ad creative production (fully loaded) | Product and shipping costs, which belong in margin |
| Acquisition tools (fully loaded) | Spend aimed at reactivating lapsed customers |
Two errors distort CAC most often. Counting all customers, or all orders, instead of first-time customers makes CAC look lower than it is, and the gap is largest for a brand with a strong repeat base. Counting spend on existing customers makes it look higher. Check the first-time customer count first, because a growing repeat base is what makes an all-customers CAC look low.
What is the difference between blended and channel CAC?
Blended CAC divides acquisition spend by all first-time customers, including those who found the brand through search, word of mouth or press. Channel CAC divides each channel’s spend by the new customers your attribution tool credits to that channel. Blended CAC is usually lower and easy to measure; channel CAC is usually higher and depends on attribution, which is never exact.
Track blended CAC as the headline and channel CAC as a check. A falling blended CAC can hide a rising channel CAC if organic growth is doing the work, so it is worth looking at both before drawing a conclusion.
What is a good customer acquisition cost?
There is no good CAC in isolation. A £60 CAC is affordable for a brand whose customers are worth £200 in margin in their first year, and unaffordable for one whose customers are worth £30. Judge CAC against two numbers:
- First-order margin. If the first order’s margin covers CAC, every repeat order adds margin the brand has already paid to win. If it covers less, the brand needs customers to come back.
- 12-month customer lifetime value. This is the most a brand can pay for a customer and still earn it back within a year. Our customer lifetime value calculator works it out, and the result goes straight into the calculator above.
Everboost’s view, as of November 2026, is that a brand should know both before setting an acquisition budget, because a CAC that looks high against the first order can be affordable once repeat orders are counted.
What is a good LTV to CAC ratio?
A ratio of 3:1 is a widely quoted rule of thumb. It is most associated with subscription software, where investor David Skok popularised lifetime value above three times CAC, alongside earning CAC back within 12 months. We have not found a reliable published benchmark for DTC brands. For a DTC brand the timing matters as much as the ratio: a 3:1 ratio earned mostly in years two and three ties up cash for a long time. Compare CAC with 12-month CLV first, because that is the margin a brand can count on.
Is it cheaper to keep customers than to acquire new ones?
Often, though the evidence is thinner than the quote suggests. A 2014 Harvard Business Review article notes that, depending on which study you believe and the industry, acquiring a new customer is five to 25 times more expensive than keeping an existing one, without naming the studies. The more useful point for a DTC brand is what retention does to acquisition: every extra repeat order raises 12-month CLV, and a higher CLV raises the CAC a brand can afford. Everboost works on that side of the equation.
How do you lower CAC, or afford a higher one?
- Count it correctly. First-time customers only, acquisition spend only, the same period for both.
- Compare channels on who comes back. A channel with a low CAC but few customers who reorder can cost more than a channel with a higher CAC and loyal customers.
- Check first-order economics. A deep welcome discount lowers first-order margin and makes every customer harder to pay back.
- Raise what each customer is worth. More second orders and fewer subscription cancellations raise 12-month CLV, so the same CAC pays back faster and a higher CAC becomes affordable.
To see what more repeat orders did for one brand, read the Salt Grooming case study, where returning customer sales grew 58% in 12 months. If you would like a retention agency to work out how much more each of your customers could be worth, book an intro call.
Frequently asked questions
What is the difference between CAC and CPA?
CAC (customer acquisition cost) counts only new customers. CPA (cost per acquisition) usually counts every conversion an ad platform records, which can include orders from people who have bought before, and each platform claims credit for some of the same sales. So CPA usually looks lower than true CAC; work CAC out from your own spend and your own count of first-time customers.
What is a good CAC percentage?
There is no standard percentage. A useful check is how much of CAC the first order's margin covers: 100% or more means the first order pays back acquisition, and below 100% means the brand is relying on repeat orders to break even. In the worked example, a £24 first-order margin covers 80% of a £30 blended CAC.
What is the average cost to acquire a new customer?
We have not found a reliable published average for DTC ecommerce: the figures that circulate come from vendor or agency samples and vary widely by category, price point and channel mix. A more useful comparison is your own CAC against your first-order margin and 12-month customer lifetime value, tracked month by month.
Is it cheaper to retain a customer than to acquire a new one?
Often, though the evidence is thinner than the quote suggests. A 2014 Harvard Business Review article notes that, depending on which study you believe and the industry, acquiring a new customer is five to 25 times more expensive than keeping an existing one, without naming the studies. For a DTC brand, the practical point is that every repeat order raises what you can afford to spend acquiring the next customer.
Should CAC include salaries and agency fees?
The calculator's blended CAC covers paid media only. Fully loaded CAC divides media plus the other costs of winning customers by the same first-time customers: agency fees for acquisition, creative production, tools and, if you track it, the share of team time spent on acquisition. Report both, and keep the definition the same month to month.
Should organic customers be included in CAC?
Dividing acquisition spend by all first-time customers gives blended CAC, which includes customers who found you organically and so usually looks lower. Dividing each channel's spend by the new customers your attribution tool credits to that channel gives channel CAC, which is higher and depends on attribution. Track blended CAC as the headline and channel CAC as a check.
How do you calculate CAC in Excel or Google Sheets?
Put paid acquisition spend in A2, other acquisition costs in B2 and first-time customers in C2. Blended CAC is =A2/C2 and fully loaded CAC is =(A2+B2)/C2. Use the same period, usually a month or a quarter, for every input.
What is CAC payback?
CAC payback is how long it takes the margin a new customer brings in to cover what you paid to acquire them. If the first order's margin covers CAC, payback is immediate; otherwise it depends on how many customers reorder and how soon. Our customer lifetime value calculator shows what you can afford to pay to break even within 12 months.
Do first-order discounts count towards CAC?
We leave discounts out of CAC and count them in the first order instead, because a discount lowers the margin on that order; it is not acquisition spend. Either way, a 20% welcome discount can turn a first order that covered acquisition into one that does not, so check first-order margin after discounts.
How do you reduce customer acquisition cost?
Make sure the count is right first, then compare each channel's CAC with how often its customers reorder: a channel that brings one-time buyers costs more than its CAC suggests. The other lever is what each customer is worth: raising it lets a brand afford a higher CAC and still earn it back within 12 months.