SaaS pricing and revenue models are evolving and so must traditional SaaS metrics. If we don’t adapt metrics formulas for our revenue streams, our metrics output will be incorrect and misleading. The CAC payback period is one of my favorite metrics. However, it will lead you done the wrong path if you have subscription revenue […]
CAC Payback Period
How to Calculate Your Overall CAC Payback Period
Customer acquisition cost, or CAC, is a ubiquitous SaaS metric. It’s a core sales and marketing efficiency metric. CAC measures the amount of expense to acquire a new customer and the associated revenue from that customer. However, CAC as a standalone measure does not tell us much. We need context. This context comes in the […]
SaaS Showdown – CAC Payback Period vs LTV/CAC
CAC Payback Period vs. LTV/CAC This post was inspired by a SaaS metrics question posted on Quora. The user asks, “what is more important? CAC Payback Period or LTV/CAC?” Great question, but it left me scratching my head, because it’s a difficult question to answer anecdotally. Both are important in your SaaS business but should […]
How I Calculate the CAC Payback Period
CAC Payback Period is a top operator and investor metric. It’s part of my Five Pillar SaaS Metrics Framework. It’s core to GTM efficiency calculations. There are many flavors of CAC Payback Period now. I’ll cover the traditional metric that you must master in your SaaS business. However, you should consider the Dollar-based CAC Payback […]