CAC Simulator

The CAC Simulator helps you answer the most expensive question in your startup: "How much does it cost to buy a customer?"

Inputs

To get a precise calculation, Calanar pulls data from your connected Ad Accounts, but allows you to adjust the following variables manually:

1. Marketing Spend: Total ad spend + Agency fees + Marketing salaries.
2. Sales Spend: Sales team salaries + Commissions + Tools (CRM).
3. New Customers: Total new paying logos acquired in the period.

Blended vs. Paid CAC

The simulator outputs two distinct metrics:

• Paid CAC: Total Ad Spend / Customers from Paid Channels.
  • Use this to measure the performance of your Facebook/Google campaigns.
• Blended CAC: Total S&M Spend / Total New Customers.
  • Use this to measure the overall health of your business (including viral/organic growth).

The LTV:CAC Ratio

Once your CAC is calculated, the simulator compares it to your LTV (Lifetime Value).

• 3:1 Ratio: The industry standard. You make $3 for every $1 spent.
• < 1:1 Ratio: You are losing money on every customer. Stop spending immediately.
• > 5:1 Ratio: You are under-spending. You can afford to be more aggressive to grow faster.