Saas · Strategy

What is the typical acquisition cost for an SaaS customer?

Svyatoslav Dormidontov Web-developer

November 10th, 2016

I’ve been reading about some SaaS companies recently and I was stunned by how much they spend on customer acquisition. As more and more software companies are adopting this kind of business strategy I was wondering why is so much money spent acquiring customers. Does this pay out in the long run? What is the typical acquisition cost for a SaaS customer? I’ve read somewhere that it goes up to 40 - 50% of the revenue. This is crazy. What do you think?

Harsh Vardhan Co-Founder & Chief Number Cruncher:

November 13th, 2016

The trick lies in making sure, that one has more than one mode of maximizing CLTV!

Scott Bundren Marketing Director at 3 Cents Media

November 10th, 2016

Are you saying its crazy to spend $50 for a customer with a lifetime value of $100?

Jorge Lopez CFO & Chief Strategy Officer, Cofounder at ConquerX - MassChallenge Finalist | altMBA | Mentor @MIT Global Entrepreneurs

November 11th, 2016

The LTV-to-COCA ratio is the key metric, LTV = 3 x COCA (Cost of Customer acquisition). Be sure your business model make your sales funnels very efficient this way you can reduce the COCA.