Calculating CAC is one of those tasks that looks like a two-minute spreadsheet exercise and turns into an afternoon when you start asking what counts as "acquisition spend." This walks through the actual steps — what to include, what to exclude, and where most merchants get it wrong.
Step 1: pick a period
Most teams calculate CAC monthly and quarterly. Monthly is operational; quarterly smooths out volatility. For long sales cycles (B2B), look at quarterly or even rolling 90-day CAC.
Step 2: total your acquisition spend
Include everything spent in the period that was meant to win new customers:
- Paid ads (Meta, Google, TikTok, podcast, OOH)
- Content production (creative, video, photography, copywriting for acquisition)
- Marketing salaries (fully loaded — salary + benefits + payroll tax)
- Marketing software and tooling
- Agency and contractor fees
- Affiliate and influencer payouts
- SEO tools and content production for organic acquisition
- Sales team costs (where applicable)
Exclude: fulfillment, customer support, retention software, product development, R&D, payment processing. Those are post-acquisition.
Step 3: count new customers
Only customers who placed their first order in the period. Exclude returning customers, win-backs, and customers transferred from another business unit. Shopify's customer reports give you this count cleanly.
Step 4: divide
CAC = Step 2 ÷ Step 3
If you spent $30,000 in March on acquisition and signed up 300 new customers, March CAC is $100.
Step 5: split paid CAC from blended CAC
For more insight, calculate two versions:
- Blended CAC — all acquisition spend ÷ all new customers (including organic). Tells you overall efficiency.
- Paid CAC — paid spend ÷ paid-attributable new customers only. Tells you the truth about your paid channels.
Looking at only blended hides paid channels that are unprofitable. Looking at only paid ignores the organic flywheel.
Step 6: compare to LTV
CAC alone is meaningless. The comparison is LTV — what is each customer worth over their lifetime? Healthy benchmark is LTV:CAC ≥ 3:1. Without that comparison, you cannot tell whether $100 CAC is excellent or catastrophic.
The common mistakes
- Including organic customers in the denominator with paid spend only in the numerator. Deflates CAC.
- Excluding salaries and tools. A two-person growth team is $200K+/year of unbooked acquisition cost.
- Mixing time periods. March spend acquires customers in March and April.
- Confusing CPA with CAC. CPA is the channel-level ad metric. CAC is the fully-loaded business metric.