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6. The SaaS Secret No One Wants to Talk About

https://www.udemy.com/course/essential-customer-success/learn/lecture/20766692#content

To explain how what I do as a CSM will impact the finantial impact on my company

Customer Acquisition Costs

• Invest in customers before you get customers
  • Marketing and Sales dollars must be spend
  • Some will become customers, some will not
  • It may take a long time before new customers sign contracts

Costs of Acquiring a new Customer

• CAC = ( CostOfSales + CostOfMarketing ) / CustomerAcquired

Cost of Sales + Cost of Marketing
Number of Customers Acquired

Example:

• $1.3M spent on Marketing
• $1.2M Sales (5 meetings avg. with 3 or more stakeholders per prospect)
• 100 total new customers growth
• ( 1.2M + 1.3M ) / 100 = $25,000 per new customer

How expressed:

• Ratio ( X:Y)
• Percent (%)
• Cost to acquire a single dollar ($) in revenue.
  • Example
    • To acquire 1 customer cost $25,000
    • Average Deal = $25,000
    • It costs $1 for each $1 in new revenue.
    • You did not grow.

Typical Acquisition Costs

• CAC = $1.14.
  • It costs More to gain a customer than you make from the customer!