The most common CAC Ratio is the Sales and Marketing Expense divided by the New Subscription Bookings. The Booking number should be matched with the associated Sales and Marketing expense to the extent it is a practical exercise. Typically, Enterprise SaaS companies use figures from the same year since variations in the Sales Cycles make attribution difficult and, usually, not very valuable. Small and Mid-Market SaaS Companies typically use the prior quarter or month since the sales cycle is shorter for these businesses. Business-to-Consumer (B2C) SaaS companies usually use the preceding month’s Sales and Marketing expense because the Go-To-Market strategy focuses on Call-to-Action marketing, which leads to quick customer response. The CAC Ratio can be interpreted as the Sales and Marketing investment needed to acquire $1.00 of new Subscription Bookings.
The most common CAC Ratio is the Sales and Marketing Expense divided by the New Subscription Bookings. The Booking number should be matched with the associated Sales and Marketing expense to the extent it is a practical exercise. Typically, Enterprise SaaS companies use figures from the same year since variations in the Sales Cycles make attribution difficult and, usually, not very valuable. Small and Mid-Market SaaS Companies typically use the prior quarter or month since the sales cycle is shorter for these businesses. Business-to-Consumer (B2C) SaaS companies usually use the preceding month’s Sales and Marketing expense because the Go-To-Market strategy focuses on Call-to-Action marketing, which leads to quick customer response. The CAC Ratio can be interpreted as the Sales and Marketing investment needed to acquire $1.00 of new Subscription Bookings.
