Lifetime Value (LTV) and Customer Acquisition Cost (CAC) are common SaaS metrics that tell you how much it costs to gain a customer and how much that customer is likely to provide in revenue. Looking at these two in relation to each other — using a metric called LTV/CAC ratio — provides a cost-benefit analysis of the process you’re using to get and retain customers. The LTV/CAC ratio is one of the most important metrics you can look at to get a handle on how efficiently your

Customer Acquisition Cost (CAC) is a key SaaS metric that accounts for how much it costs your company to procure each new customer. The received wisdom is that reducing your CAC is one of the best ways to increase your company’s profitability and likelihood of success. However, this metric calls for discerning judgement. What it tells you about your company will depend on your goals, your business model and needs, and your customer lifecycle. There is no single answer to the

Increasing the efficiency of your customer acquisition cost (CAC) is one of the best ways to increase the profitability of your SaaS company. Streamlining your customer acquisition by looking at improving overall processes can be the key to sustainable growth and improved cash flow, but it needs to be approached strategically. Many CAC optimization efforts simply waste time and money, resulting in little change to the initial metrics. Why Improving Your CAC is so Important Cu

In days of yore, before online tools that allow companies to see exactly where their customers are coming from, advertising was a big old guessing game. Was a new buyer drawn in by a particular promotion? No way to tell! Was an expensive ad buy really worth it, in terms of ROI? Who knows! Let’s throw more at the wall and hope that it sticks! Tracking tools help all types of business in the modern era avoid this groping in the dark, but they’re especially effective for those t

How effective is your sales and marketing? How much does it cost to bring in new customers — and how does that compare to what you expect to earn from customers over their lifetime? Looking at your CLTV to CAC Ratio can yield insights into how efficiently your company is spending its sales, marketing, and customer retention dollars and, in the long term, how valuable your company is. It can also tell you whether or not you’re in a strong enough position to lure in equity inve