Advice needed: Customer acquisition costs (B2B)
Hi guys!
I am currently working on my forecast and my CAC (customer acquisition costs) seems much higher than I initially anticipated. I have not tested a lot yet and worked mainly with Google Ads but at this moment it's above $250 per newly added paid customer. The ads are slightly fine-tuned but I can definitely still get this down.
I was wondering what the average CAC are for SaaS businesses that generally have pricing plans ranging from $10-$15 per month (per customer). I am only interested in PAID customers for this calculation (so not in users that created an account, whether it be trial or freemium).
The average CLV would also be interesting to know!
Would be great if somehow has some helpful info here! :)
Thanks!!
Depends on the churn rate and CLV ofcourse.
$250 is huge CAC for a $10-$15 per month assuming the customer churns in less than 2 years.
Thanks! Very helpful.
Do you think that most project management tools (Basecamp, ClickUp, Monday, Asana, etc.) have a much lower CAC?
What would be to most important tools for acquisition outside of paid ads?
Good question. Tools like Basecamp, Monday, Asana are also useful for companies with thousands of users. For them its more about building brand too. For example, even if they acquire small time users with ads, eventually they build brand and once they signup companies with thousands of employees, they make huge money all of a sudden as they charge based on MAU.
But if you are a small time player and the product is not for mass adaption, it's tough. You can still survive with ads at $250 CAC but still not going to be an easy rise.
What would you consider a good/fair CAC for a business as such (while it being realistic, especially in starting phases of a company)?
Yes, the CAC needs to come down, but I'm confident I can get this to $150. Thanks for your input.
Hi Bob, it's actually highly related on business and its products, but 250$ seems high for me. Maybe you need to work to better find the audience, countries and meanwhile reducing the costs for your business. For example - if you are working on AWS or need ClickUp - you can register on some providers and get free credits (5k for AWS, 1k for ClickUp) etc.
A general rule of thumb is to aim for 1:3 CAC:LTV
Thanks for the comments, helpful!
Any ballpark numbers? Wondering if the $250 is good/bad/normal. This helps me to more accurately forecast :)
Anybody :) ?
So CAC highly depends on the industry so it differes. We have been running a B2B SaaS as well and our CAC was close to yours. So as the guys mentioned what really matters is LTV:CAC ratio for for me may be your price seems quite low to your industry or you are probably not hitting the right market/channel yet ..
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