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CAC IS BACK. HOW TO INSPECT AND REDUCE CUSTOMER ACQUISITION COSTS.

 * By James Hong
 * Categories:
   * B2B Sales
   * Customer Success
   * Sales Operations
   * Sales Tech Stack


TOPICS COVERED IN THIS ARTICLE:

 * Account-level visibility into CAC is key to driving better margins and
   profitability
 * Video: Using AI to double down on your most profitable accounts
 * Explore our self-guided demo to see AI and data-driven decisions in action
 * Sign up for a full demo to learn more

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Calling all CFOs, RevOps, and customer success leaders: Do you know your
customer acquisition cost (CAC) at the account level? Are you using CAC data to
drive higher margins? 

According to David Sacks (General Partner at Craft Ventures), in a downturn
economy, the only three things that matter are:

 1. Growth
 2. Burn
 3. Margins

Watch David Sacks elaborate on this topic in the clip below (2 minutes in
length), which is from the All-in Podcast, Episode 117: 

1:58









Watch the full episode here.

Why is the clip relevant? In 2023, companies are trying to figure out how to
drive profitable growth. Gone are the days of growth at all costs.  

For large public companies, there is escalating shareholder pressure to drive
higher margins.

Growth stage companies are managing burn rates and runway to ensure they can
raise the next round of funding on favorable terms and minimal dilution.

For many companies, the #1 expense is people. In fact, the most recent series of
layoffs – especially in the tech space – shows that this is the case. Companies
are taking steps to tighten their belts and do more with less.

Unfortunately, most companies are still unable to answer critical questions
around topics like:

 * Driving profitability: Which accounts do we need to switch to a more
   profitable product/service mix before we start losing money on the account?
   
 * Customer engagement: Which account buyer personas do we need to engage to
   retain them and expand? Which accounts and products are driving the highest
   margins relative to the cost to acquire, maintain, and support the customer?
   
 * Go-to-market (GTM) planning: As we plan GTM for next year, which verticals,
   segments, regions, teams, or products should we double down on (or divest) to
   drive higher margins and profits?


ACCOUNT-LEVEL VISIBILITY INTO CAC IS KEY TO DRIVING BETTER MARGINS AND
PROFITABILITY

So what’s the best way to measure the profitability and scalability of the
business? Watch David Friedberg elaborate on this topic in the clip below (2
minutes in length), which is also from the All-in Podcast, Episode 117:

2:27









Watch the full episode here.

In the clip above, David Friedberg explains the urgency behind understanding
your customer lifetime value (LTV) to CAC ratio in the aggregate (i.e., at the
company level). But more granular visibility into customer acquisition costs
(down to the account level) is needed to drive profitability today.

Most CFOs and financial planners have dollar totals on how much the customer
success team costs, or the sales team costs in the aggregate, but they don’t
have visibility into CAC down to the account level. And they’ve never had it.
They can calculate GROSS margins for the business, but don’t have the ability to
make account-level decisions on divesting or investing, or changing to a
different product mix, based on profitability.


VIDEO: USING AI TO DOUBLE DOWN ON YOUR MOST PROFITABLE ACCOUNTS

Below is a short, 5-minute demo video that outlines how some of the world’s
leading companies are driving profitable growth by making data-driven decisions
– enabled by AI. In this demo example, we are looking to drive higher margins by
doubling down on our most profitable verticals and accounts.

5:07











EXPLORE OUR SELF-GUIDED DEMO TO SEE AI AND DATA-DRIVEN DECISIONS IN ACTION

How do you measure CAC? What’s included or excluded? How does your CAC metric
impact how you plan for the business and go to market?  What data do you use to
measure growth efficiency?

Use our hands-on demo environment below to see how AI and data can enable your
teams to reduce CAC and drive more profitability for your organization.

Launch Demo
×



SIGN UP FOR A FULL DEMO TO LEARN MORE

Ready to continue the conversation? Register for a demo to see how leveraging AI
and engagement-level data will help your teams drive growth and improve margins
by focusing on your most profitable accounts.




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