Customer Acquisition Cost (CAC):
Calculating and Optimizing
Price Intelligently’s SaaS Metric Mondays
Customer Acquisition Costs (CAC)

Let’s talk about CAC
Your SaaS company’s toughest balancing act
Customer Acquisition Costs (CAC)

CAC =
Customer Acquisition Cost
Customer Acquisition Costs (CAC)

CAC =
The total cost of sales and marketing efforts that are
needed to acquire a customer. It is the defining factors in
whether your SaaS company has a viable business model
that can yield profits by keeping acquisition costs low as
you scale
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Customer Acquisition Costs (CAC)

Here’s How You Breakdown CAC Visually
(spreadsheet breakdown)
Customer Acquisition Costs (CAC)

All that stuff is great but…why
should you even care?
Customer Acquisition Costs (CAC)

“Customers Are Costly – Not
managing CAC is like descending
from the face of Yosemite without a
harness”
Customer Acquisition Costs (CAC)

More specifically…
Understanding your CAC can help
Shorten the sales cycle
and get customers using
the product faster
Sales
Improve projections and help
determine the companies
profitability
FinanceMarketing
Optimize channels that
actually bring in good
leads and prospects
See the breakdown of your MRR Churn with ProfitWell >>
Customer Acquisition Costs (CAC)

Lets dive deeper and
calculate CAC like a
#Champ
Customer Acquisition Costs (CAC)

Calculating CAC is all about the
money going into S&M
With CAC it is simple, look at the Total Sales
& Marketing and the Total New Users
CAC Criteria Breakdown
Items to Include Items to Exclude
Sales & Marketing
(Salaries, Tools, Spend) Customer Success Costs
New Users Churn
Customer Acquisition Costs (CAC)

CAC =
EQUATION:
Total Cost of Sales & Marketing
# of Customers Acquired
CAC =
S&M
Salaries-Tools-Spend
1
+ S&M
Salaries-Tools-Spend
2
S&M
Salaries-Tools-Spend
n
…
Acquired
Customer
1
Acquired
Customer
2
Acquired
Customer
n
…+
SIMPLIFIED:
$36,000 (Sales & Marketing Spend)
EXAMPLE:
CAC =
1,000 (Customers Acquired)
= $36
The SaaS language of CAC
Customer Acquisition Costs (CAC)

Once you master calculating
like a #champ you can
optimize like an even bigger
#SaaS metric machine
Customer Acquisition Costs (CAC)

Get your CAC As Close To “0” As
Possible By:
1. Optimize your funnel
2. Strengthen Sales & Marketing spend
3. Quickly engage new customers
and prospects
4. Inbound Marketing $
$
$
$ $
$
$
$
$
$
$
$
Customer Acquisition Costs (CAC)

Quantify each step of the process, and understand how many
visits lead to leads, how many leads lead to opportunities and
how many opportunities lead to customers
Key Optimization
Optimize your funnel
Visitors
Stranger
Leads
Opportunity
Customer
Customer Acquisition Costs (CAC)

Take a lean approach to marketing and sales
expenses. Put money into channels that have proven
returns so that you aren't wasting any more dollars
Key Optimization
Strengthen sales & marketing spend
Customer Acquisition Costs (CAC)

Cut down the time it takes to get new customers engaged
with your product. The quicker product engagement
happens per customer the cheaper acquisition becomes.
Key Optimization
Quickly engage new customers and
prospects
Customer Acquisition Costs (CAC)

Use real deal sweat equity to produce content that provides value for
your audience. It’s a great way to bring leads through your funnel at
minimal cost to your business
Key Optimization
Inbound marketing
Customer Acquisition Costs (CAC)

Boom. You’re now a CAC champion.
Customer Acquisition Costs (CAC)

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Customer Acquisition Costs (CAC)