How To Easily Calculate Segmented CAC

Written by
Ross Andrewsarrow icon

How To Easily Calculate Segmented CAC

Written by
Ross Andrews

CAC, or Customer Acquisition Cost is a commonly reported and tracked SaaS/Startup metric, especially in the early and growth phases as most forms of investable capital is invest to help subsidize the cost of customer acquisition. We wanted to show how with just a google sheet or SQL console you can easily find your CAC across customer segments.

First, go into your CRM (Salesforce, HubSpot, etc.) and look at the total number of new customers acquired over the last 12 months. Next, run a query to COUNT all the unique events that took place during all of these opportunities and then GROUP BY the segmentation category that you prefer or have available in your CRM on the customer object (Industry, MRR, Unit Size, etc.), this will yield two numbers, the total number of sales events over the last 12 months and the total number of unique sales events per segment over the same time period.

Next, go into your accounting system and add up the cost of your sales and marketing over the same twelve-month period (payroll, overhead, paid marketing, etc.), this is your total "cost" of acquiring those customers over the last 12 months. If you take the total event count from above and divide our total "cost" by that event count and you will get your "$ Cost per Acquisition Event" which is a unit economic level representation of the cost per event when acquiring a customer.

With that number, we can now go back to our event count that is grouped by the segmentation characteristics, run your group counts on whichever characteristic you think is most significant to your company, or if you're not sure, try a couple of characteristics to see how the results come out. Once you have your group counts over the last 12 months, multiple each number by our "$ Cost Per Acquisition Event" number and then divide them each by 12. That will give you the average CAC per segment each month over your trailing twelve months.

See anything interesting? Is one customer segment much higher than others, more often than not, SaaS/Subscription startups have varying CAC across customer segments? Segmenting out these numbers will enable you and your teams to understand where your best customers are coming from and where you might have inefficiencies in your customer acquisition strategy. It will also help you find the customer segments that have the best economics (CAC Payback, Revenue Trough, etc.) to help drive sustainable growth for your business.

If you want to chat more about how to find segmented CAC in your own data, shoot us an email, we love meetings founders and helping consult with their business to help set them u for success.

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