Here's to calculating your CAC the right way
When it comes to your CAC it literally pays to be meticulous. You want to consider every detail and potential caveat in both total acquisition costs and acquired customers to determine your true CAC. You might not want to think about how much you are spending on each and every customer, but it is imperative to calculating the right unit economics for your business.
Remember when you're thinking about your CAC that it isn't a race to the bottom. Though it's helpful to your cash flow to pay less to acquire each customer, the very cheapest customers aren't necessarily the ones you want to acquire. They won't see the value in your product and might not stick around for very long.
That's why it's important to know how you're going to monetize your customers once you've acquired them. You want customers that are going to stay and pay—this is how you'll achieve an LTV that will pay back and earn profit past your CAC.
Start with good fundamentals. Calculate your CAC correctly and lay the groundwork to master your SaaS metrics and build your company's success.
P.S. To help you keep your finger on the pulse of customer activity, we created a free software called ProfitWell Metrics. Check it out!