When recovery periods are longer than ideal, improvements will be necessary in areas that affect rapid recovery. The duration of CAC Payback is determined by the following factors:
Customer acquisition costs (CAC). Subscription-based advertising database businesses assume the risk of paying the cost upfront and replacing it as the customer pays over time. The higher the initial CAC, the longer it will take to recover the investment.
Customer monetization. The type of payment plan created for customers also influences the length of the payback period. A flat fee may be charged, individualized plans may be created, or pricing may be scaled.
By improving these factors, we'll be able to recover CAC more quickly and have cash flow to reinvest and continue growing.
CAC Payback allows you to determine how much cash a company needs before turning a profit. It's an excellent measure of financial efficiency for SaaS companies.
It's estimated that SaaS companies currently have a CAC payback period of approximately 5 to 12 months. The most efficient companies are closer to 5 months or even less. It takes less performing companies about 12 months to achieve CAC payback.
- Board index
- All times are UTC
- Delete cookies
- Contact us