Connecting the Dots & increasing CAC Ratio with Marketing Automation
Asked, “what is the single most effective metric for a SaaS business?” Dharmash Shah, Co-founder and CEO of SaaS giant, Hubspot replied, “One of the metrics we track most maniacally at HubSpot is the LTV:CAC ratio (life-time-value:customer-acquisition-cost)… As a rule of thumb, I think that the LTV:CAC needs to be 3 or higher to build a successful SaaS business in the long-term.”
Bessemer Venture Partners offers this core advice:
If your CAC Ratio < .33 = cut spending or increase efficiency
If your CAC Ratio > 1 = invest more and step on the gas1
Most SaaS companies realize that traditional sales and marketing is not optimal when the goal is to put the pedal to the metal. A better option is a digital marketing play, built on a strong infrastructure of integrated CRM and Marketing Automation. But you need to do it right.
NuGrowth’s latest eGuide “Insider’s Guide to SaaS Marketing” explores ten key things you can do to ensure your digital marketing campaign does what it’s supposed to: drive leads to your sales team, shorten the sales cycle and reduce customer acquisition costs.