Customer Acquisition Cost (CAC) = sum of all sales & marketing expenses/ number of new customers added

From For
Quote in Market Research

David Skok has noted that there is a problem with using this formula, as you may have several expensive people in the team that should scale to handle a larger number of customers as you grow. In this case, your CAC will be too high. David suggested making a very simple adjustment to the Sales & Marketing expenses to take only a portion of those salaries and expenses in the early days. This will provide a better indication of how CAC will look in the future when you are at scale.


More SaaS + Software Stats

High-growth companies generate 60% fewer sales opportunities than low-growth companies

For a SaaS business of almost any scale, the valuation impact of better retention is in the tens of millions over time

SAAS companies that are focused mainly on enterprise sales have higher levels of professional services

56% treat “Existing Customer Renewals” as high priority

Internet sales strategies are the only sales method to see a decline in CAC, dropping from $0.54 to $0.42 between 2014 and 2015

Three uses for the SaaS Guidelines

Negative Churn and Expansion Revenue

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The median annual unit churn for SAAS companies was 10% in 2016

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If you are charging $500 per month, you can afford to spend up to 12x that amount (i.e. $6,000) on acquiring a new customer

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86% of SaaS businesses treat “New Customer Acquisition” as their highest growth priority, both in terms of executive support and funding available

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