The CAC Payback Period is the number of months required to pay back the associated customer acquisition costs and is calculated as the CAC divided by the Average Monthly Gross Profit.The best practice for SaaS companies is to segment the CAC Ratio into two different ratios according to the type of sales activity defined as New Customer and Expansion. In my experience, the CAC for Expansion Bookings is approximately one-third the cost of acquiring New Customers. Therefore, distinguishing the CAC for each type of sale aids Go-To-Marketing strategy and management. When you use these specific measures, also provide a Blended CAC Ratio, the aggregate calculation for the business.
The CAC Payback Period is the number of months required to pay back the associated customer acquisition costs and is calculated as the CAC divided by the Average Monthly Gross Profit.The best practice for SaaS companies is to segment the CAC Ratio into two different ratios according to the type of sales activity defined as New Customer and Expansion. In my experience, the CAC for Expansion Bookings is approximately one-third the cost of acquiring New Customers. Therefore, distinguishing the CAC for each type of sale aids Go-To-Marketing strategy and management. When you use these specific measures, also provide a Blended CAC Ratio, the aggregate calculation for the business.
