How much does a new customer cost?
When we mention customer acquisition cost (CAC), we are referring to all costs incurred in signing up a customer. Different costs are associated depending on your line of business, for instance, if you’re an online marketer, you’ll include the costs of all your campaigns. In a traditional SaaS business, it might mean everything from all your staff’s salaries, all marketing and sales costs. It is recommended to recover your CAC in less than one year of your customer’s subscription. If this isn’t the case, you’ll burn through all your capital before you can depend on your monthly recurring revenue.
Performance Indicators
The goal is to increase customer lifetime value and average revenue per unit or user/account, while cutting CAC, to maintain a profitable business.
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