How to Actually Calculate Your True Cost to Acquire a Customer (CAC)

Figuring out your CAC is simple, and if you're running ads, you absolutely need to know this.

First, get two numbers:

1. How much you spent on marketing (on a specific platform)

2. How many customers you acquired from that spend

Then just divide:

Let’s say you spent $5,000 on Google Ads last month and got 5 customers.

Your CAC is now $1,000 per customer.

If your service is priced higher than $1,000, you’re profitable (in the green). That doesn't mean you're good, it just means you're not losing money immediately. You might still need to optimize your ads, but at least your base CAC is covered.

If your service is priced below $1,000, you're losing money immediately, and something needs to change, fast.

But here’s the kicker: Maybe your initial service is break-even or even slightly losing, but you make money through upsells or long-term customer value (LTV). That’s fine—but only if you’re aware of those numbers.

The key is that knowing your CAC lets you make clear, math-based decisions instead of guessing or relying on feelings.

And if your ads aren’t converting yet, look deeper at these numbers:

• CTR (Click-through Rate)

• CPM (Cost per 1,000 Impressions)

• CPQL (Cost per Qualified Lead)

• Cost per Call/Meeting

You should know within the first 6 days if your ad is actually going to work or not. I’ve seen business owners run the same ads for months just because they "feel" it might eventually work. Don’t do this. Always rely on data.

Trust the numbers, not your gut feelings.

Yes, get creative with your ad design and messaging, that’s critical. But when judging performance and profitability, it's always math, always data, and always about testing.

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