SaaS metrics
Customer acquisition cost (CAC)
Also called CAC.
Customer acquisition cost (CAC) is how much you spend, on average, to win one new paying customer.
Add up what you spent on marketing and sales in a period, such as ads, tools and paid help. Divide it by the new customers you won. Spend $600 and win 4 customers, and your CAC is $150. Some founders also count their own time.
Compare CAC with lifetime value: a customer should bring in much more than they cost. The payback period tells you how soon you earn it back. With few customers the number jumps around, so calculate CAC each month, per marketing channel, using attribution.
Go deeper
- How to calculate CAC and payback periodCalculate CAC and payback period with a few customers and almost no ad spend: one sheet of dollars and hours by channel, a 5-minute daily log, and a Sunday rule for where your money and hours go next.
- How much to spend on marketing as a SaaS startupSaaSSet your SaaS startup's first marketing budget when you have almost no revenue: 5 to 6 hours a day, under $100 a month for tools and $0 for ads until 10 people have paid, with the maths that shows when ads can pay and a Sunday sheet.
What links here
- How to get clients on UpworkAgency
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- How to set a marketing budget for your agencyAgency
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