As a SaaS CEO, one of the things I’ve always wanted at my fingertips is a library of SaaS metrics calculators. Turns out I’m not alone in that desire. Metrics-obsessed SaaS leaders rejoice! Or at least get out of the spreadsheets. Today’s Married2Growth CAC Calculator is the first of many tools that we see as fundamentally useful in operating a growing SaaS company.
Instant CAC Calculator
Evaluate your customer acquisition cost (CAC) and your CAC recovery time using this handy CAC Calculator. It takes sales and marketing expenses for a period (ideally offset by sales cycle) and spreads them over new customer count (for a month or quarter). Then it looks at new ARR (gross annual recurring revenue) to calculate the number of months required to recover your CAC. (In the interest of getting our MVP launched, version 1.0 calculates against gross revenue. Watch for the option to calculate CAC recovery against gross margin in a future update.)
A Bit About CAC and CAC Recovery
CAC is one of eleven key SaaS growth metrics in my recent eBook. It’s a primary indicator of capital efficiency, executional risk, and sales and marketing efficacy. It’s also a number that leadership track over the lifecycle of the business. Early on, if your balance sheet is flush, it’s okay to recover CAC in more than a year. Later, it becomes important to recover CAC in under a year as growth accelerate and sales and marketing get dialed in. The fact is, the faster you recover CAC, the more capital efficient you are. And, needless to say, if you’re bootstrapped, it’s vital that you track your CAC and recover it fast. Like 6-9 months, fast.
Read more about CAC and ten more metrics in the eBook, enjoy the CAC Calculator and please let me know if you have feedback or (gasp) find a bug or typo. Look for a whole new section of Married2Growth Tools in the coming weeks. Cheers.