SaaS Customer Acquisition Cost (CAC) Calculator

Cost of Customer Acquisition (CAC) measures the expenses made by your SaaS company to win new customers. It’s essential to be mindful of the investments you are making and allocate resources efficiently. 

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    Strategic Value Importance

    Understanding the cost of customer acquisition is crucial for creating an effective marketing strategy.

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    Operational Impact Insight

    Tracking customer acquisition costs can enhance the effectiveness of sales activities and increase team efficiency.

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    Growth Opportunities Analysis

    Lowering customer acquisition costs is likely to foster sustainable growth and higher profitability.

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SaaS Customer Acquisition Cost (CAC)

$0.00
Total Sales and Marketing Expenses $0.00
Number of New Customers 0
Customer Acquisition Cost (CAC) is calculated by dividing total sales and marketing expenses by the number of new customers acquired during the same period.

How to Calculate SaaS Customer Acquisition Cost (CAC)

Calculate your SaaS customer acquisition costs (CAC) by following these steps: 

  1. Determine your Total Sales and Marketing Expenses. This includes all costs related to sales and marketing efforts, such as salaries, advertising, and tools. For example, a small SaaS company might spend $10,000 a month, while a larger one could spend $100,000.
  2. Identify the Number of New Customers Acquired during the same period. This is the total number of new paying customers you gained during the same period you measured your expenses. A small SaaS might acquire 100 new customers in a month, whereas a larger company could acquire 1000.
  3. Divide your Total Sales and Marketing Expenses by your Number of New Customers Acquired. This calculation results in your CAC. It shows how much you’re spending to gain each new customer. Using the example, the small SaaS CAC is $10,000 / 100 = $100, and the larger SaaS CAC is $100,000 / 1000 = $100.
  4. Interpret your CAC. Your CAC represents the cost of acquiring one new customer. Lower CAC values are generally preferred. A CAC of $100 means you’re spending $100 to acquire each customer. Keep track of your CAC trends to identify areas for improvement.

SaaS Customer Acquisition Cost (CAC) = (Total Sales and Marketing Expenses Incurred to Acquire Customers / Number of New Customers Acquired)

Understanding SaaS Customer Acquisition Cost (CAC)

Ioana Grigorescu

December 17, 2024

What is Customer Acquisition Cost?

In the SaaS industry, Customer Acquisition Cost (CAC) includes all the expenses involved in sales and marketing to acquire a new customer, such as advertising costs and the salaries of sales staff. If you spend $1000 on these efforts and gain 10 new customers, your CAC would be $100 per customer. Understanding and managing CAC is crucial for maintaining a profitable business.

  • Evaluate marketing effectiveness by understanding SaaS Customer Acquisition Cost (CAC).

  • Optimize budget allocation by identifying cost-effective channels through SaaS Customer Acquisition Cost (CAC).

  • Forecast business profitability based on your SaaS Customer Acquisition strategy incorporating CAC.

Practical Examples of SaaS Customer Acquisition Cost

  • Example 1: SaaS company allocated $50,000 for sales and marketing over a one-month period and successfully acquired 100 new customers. This results in a Customer Acquisition Cost (CAC) of $500 per customer.
  • Example 2: A SaaS company spent $20,000 on a targeted marketing campaign and secured 50 new sign-ups, leading to a CAC of $400 per customer.
  • Example 3: Consider a SaaS platform that invested $75,000 in combined sales and marketing efforts, attracting 150 new customers. This implies a CAC of $500 per customer.
Period Marketing Spend New Customers CAC CAC Change CAC Change (%)
Month 1 $10,000 100 $100.00 – –
Month 2 $12,000 130 $92.31 -$7.69 -7.69%
Month 3 $15,000 170 $88.24 -$4.07 -4.41%

CAC = $15,000 / 170 = $88.24

Different Ways to Calculate SaaS Customer Acquisition Cost (CAC)

  • Basic CAC: The basic Customer Acquisition Cost is the sum of all expenses in sales and marketing dedicated to new customer acquisition, divided by the number of new customers acquired. It provides an initial assessment of the CAC rate.
  • CAC by Channel: This calculation method focuses on determining the acquisition cost for each marketing channel, such as paid ads or content marketing. It helps in budget allocation and pinpointing effective channels.
  • Blended CAC: A combined measure of all acquisition expenses across different channels. It offers insights into the holistic business performance related to customer acquisition.
  • Fully Loaded CAC: Includes all possible costs associated with acquiring customers, such as salaries, software, and overhead. This approach gives a comprehensive view of total acquisition expenses.

How to Improve Your SaaS Customer Acquisition Cost

  • Refine Your Ideal Customer Profile (ICP): Clearly define who your best customers are. Focus your marketing on them, which avoids wasted ad spending. Study your current customers to understand what makes them a good fit.
  • Optimize Your Sales Funnel: Identify where customers typically leave your sales process and enhance these areas. A smoother process can lead to more conversions and lower CAC. Utilize analytics tools to examine your funnel and experiment with adjustments on crucial pages.
  • Improve Onboarding: Create an excellent initial experience for new customers. This can enhance customer retention, resulting in a lower CAC over time. Develop a comprehensive onboarding program complete with guides and support to assist new users.
  • Use Content Marketing: Develop and share valuable content through blogs and videos to draw in potential customers. This approach can generate leads more cost-effectively compared to traditional paid advertising. Devise a content strategy that resonates with your target audience’s interests and needs.
  • Create a Referral Program: Motivate current customers to refer new ones, which can often be more cost-effective and foster greater loyalty. Implement a straightforward referral program that rewards both the referrer and the new customer.

More Calculators

  • SaaS CAC Payback Period Calculator

    Think of the CAC Payback Period as the number of months it takes for a new customer to generate enough revenue to cover the cost of acquiring them. It helps you understand how fast you’re recouping your investment. 
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  • SaaS Cost Per Lead (CPL) Calculator

    Think of SaaS Cost Per Lead (CPL) as the price you pay for each potential customer; it's a crucial metric that helps SaaS businesses understand the efficiency of their marketing and sales efforts.
    Try it

  • SaaS LTV/CAC Ratio Calculator

    Think of the SaaS LTV/CAC ratio as a balance scale, with the revenue side (LTV) and cost side (CAC) used to capture a customer. If the scae is balanced, the growth of the SaaS company is expected to be stable.
    Try it
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