How to reduce Customer Acquisition Cost for SaaS services?

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Customer acquisition cost is the amount your company pays for each new customer. Learn how to reduce CAC for SaaS companies in this article.

One of the most important metrics for businesses is the customer acquisition cost (CAC). This metric, when combined with other numbers, can point the way to making your business more and more profitable.

The secret is to learn how to reduce that value to increase profitability.

In today's article we are going to talk about how to reduce the CAC of SaaS services .

Continue reading!

What is CAC?
Customer acquisition cost ( CAC) is the amount paid by your company venezuela phone data for each new customer.

When your company invests, for example, $5,000.00 per month in customer acquisition and wins 10 new customers, each of these deals closed cost your company $500.00.

CAC = sum of all amounts invested in acquiring new customers / number of customers acquired

Why is it necessary to reduce CAC?
Now that you know what customer acquisition cost is, it's time to understand why you need to reduce it.

Your company's profit is directly linked to the cost of customer acquisition.

When a customer costs $500.00, they only start bringing in real profit when your ticket exceeds that value. If your company's average ticket is below that number, your customer is still hurting your business.

Low customer acquisition costs are responsible for increased profitability. The cheaper each new customer costs your company, the lower the value of their purchase must be for it to start bringing good results for your business, which will maintain profitability and sustainability.

The frequency of purchases is what will ensure real profits come to your business, cooperating for its growth and development.