💬 Knowing your CAC with confidence is pretty key to know when it comes to unlocking growth for any business, let alone if you're a SaaS founder - even just as important to know for marketers to better understand which areas/channels, campaigns (etc), can be improved to help keep fuelling the growth engine (to go faster).
Critical reasons and benefits in knowing also include helping with optimisations for marketing efficiencies for scaling, profitability measurements, pricing/business model decisions, better budgetary decision-making, investor confidence, sales/marketing scalability planning, and lots more.
And then there's knowing your CAC Payback period - which is another checklist I created with helpful areas to think about.
💬 Now, there are many tactics, tests, experiments and various campaigns that you can try, but the below checklist points I've highlighted are key strategic areas, opportunities and initiatives that you should focus on/look further into.
This is a key foundational strategic checklist point I wanted to bring up - and whilst this isn't a "tactic", it's an important audit optimisation initiative in regards to CRO, which plays a role in terms of how it impacts CAC.
I say CAC because different acquisition channels have various CAC metrics attached to themselves, and then each channel and campaign/initiative, contributes to the overall blended metric.
So, the main takeaway here is to do a deep dive audit around channel performance, and prioritise which channels or the likes of current campaigns you're running, that are causing CAC to rise.
In conjunction with the above checklist point, it's important to understand not only a reduction in cost of acquisition, but also how quickly you can recoup costs from acquisition efforts - and that's where the importance of understanding CAC payback periods comes in.
I actually put a checklist together of tactics and strategies to consider and dive into auditing and analysing.
A potential bottleneck to converting users, which in turn can affect cost of acquisition (and seeing new revenue come through 'more quickly' from new users), is a lacklustre onboarding flow and process.
Activating customers faster and providing an awesome (and seamless) onboarding UX is key for SaaS companies.
I've shared an activation strategies checklist worth checking out for optimisation ideas.
A good way to understand channel performance and whether or not you're targeting the right customer profiles/segments you want to acquire (and spending $$ dollars in the right place/areas), is by implementing lead scoring and automation around 'signals'.
From TOF/MOF initiatives, you want to focus on segmenting/tagging new user signups/prospects and putting them into personalised nurture flows, based on the data attributes they've shared.
For instance in terms of signal/lead scoring touchpoint examples, you can do:
Aligned with the above in terms of segments/tagging and nurturing, create and run remarketing ads across Meta, Google Ads, and LinkedIn Ad networks.
Ensure content and ads shared make contextual sense, and setup dynamic audiences (which I recommend using CRM audiences - which most have integrations with ads networks for), to serve ads based on the customer journey area they sit.
Affiliates are awesome to consider for SaaS companies (which I've seen work really well), as it can help with reducing cost of acquisition (as typically is cheaper to acquire users compared to ad channels), but also improve the quality of lead flow.
Plus, working with affiliates means you can typically tap into higher quality audiences which you can't normally get access to as 'cost-effectively' compared to traditional channels.
And another benefit is due to the fact affiliates (which are kind of like influencers), can help accelerate the trust/credibility of a brand.
Similar to the process of affiliates in many ways in terms of lower cost of acquisition, as well as quality lead/user signups, are referral programs.
Typically, customers who love/see value from your product, are the segments that are more likely to share, which means they can provide further context to those they want to refer, and also the person being referred would naturally 'trust' the recommendation of signing up.
Even with a two-sided referral system (where both the referrer and referred get rewarded), it's still typically going to be cheaper to other channels.
An initiative that I chat to clients and companies I work with/advise, is working with creators/thought-leaders (i.e. influencers) to collab on content creation.
There are numerous objectives as to why (aside from generating new signups) - the big factors for me and why I like this marketing strategy a lot is due to the fact that it can be more cost-effective to get in front of your ideal ICP audience segments - i.e. their audiences (compared to other channels, especially with the likes of paid like LI ads).
Plus, it's a great 'signal' to help accelerate trust/credibility for those TOF/MOF users who could be 'shopping around' testing other potential competing solutions.
Related to working with content creators and thought-leaders - developing video content across various content types, can really help with acquisition through organic channels.
Of course, there are costs in video production and working with personnel, but can be a great initiative to drive lower signup costs.
There are many SaaS startups and brands that are going down this route, and it makes a lot of sense as to why (based on many reasons I've started above already when working with content creators and influencers).
And when it comes to the production of videos, you don't need a full production crew and spending $$$ thousands - you can do the likes of Loom videos, or do first-person videos with minimal edits - plus, there are lots of video editing software tools which are fairly cheap to help streamline production and editing.
I've seen many brands doing quite well with Twitter/X threads, and the likes of carousels on LinkedIn.
And if you're struggling for ideas with content on both channels, especially with the likes of videos/graphics, here are some ideas (of course, many other ideas/tactics that I'm sharing below, and encourage you to do some research, but here are some starter thoughts that I've seen work well for clients and my own stuff):
A big area of opportunity for companies in the world of SaaS are partnership programs, working with other complementary businesses that have similar ICP audience acquisition goals.
With co-distribution across both audiences, especially through organic promotion channels and initiatives (like email marketing and socials), it can lead to more 'organic' signups (hence, resulting in lowering CAC).
Related to the above with partnerships with complementary brands, as well as the likes of thought-leaders/content creators, is by running events (both online/offline).
Then it's all about co-distribution efforts to bring the right ICP audiences into attending and engaging.
This has been well-documented and shared for many years, and it still rings true to this day - and will so moving forward, regardless of everything that's happening in the tech/digital world with search.
It's all about ensuring quality content - which will ultimately win and help brands have a competing advantage.
Owning and building a thriving community can really drive a competitive advantage for SaaS startups and help with numerous objectives.
One of those main benefits are community members (customers and prospects), naturally sharing/referring new potential target audiences to get involved.
Other key objectives of why I believe in community are because:
Another cost-effective channel, which is quite cost-effective to setup and run, are outbound marketing efforts - such as cold email and LinkedIn outreach.
And whilst there a plethora of "AI-powered outbound tools" which seem to have flooded the market (at least on PH and my LI feed haha), outbound/outreach can still be really effective for getting in front of the right ICP target audiences - it just all comes down to properly doing personalisation and that it makes contextual sense to the target persona(s).
Other key areas that can help with CAC reduction are across activation and retention marketing initiatives.
I've put together two checklists that share a bunch of other strategies/tactics/initiatives that are worth exploring as potential optimisations and experiments/tests you can run.