How to Calculate the SaaS Magic Number

SaaS operators must understand the balance between sales and marketing spend and the acquisition of net new revenue. Enter the SaaS Magic Number.  Here are my thoughts on how to use the Magic Number in 2025. Overinvest in sales and marketing relative to your new SaaS ARR bookings and will you not the see the […]

SaaS Showdown – CAC Payback Period vs LTV/CAC

SaaS Metrics Showdown

CAC Payback Period vs. LTV/CAC This post was inspired by a SaaS metrics question posted on Quora.  The user asks, “what is more important?  CAC Payback Period or LTV/CAC?”  Great question, but it left me scratching my head, because it’s a difficult question to answer anecdotally.  Both are important in your SaaS business but should […]

How I Calculate the CAC Payback Period

cac payback period

CAC Payback Period is a top operator and investor metric. It’s part of my Five Pillar SaaS Metrics Framework. It’s core to GTM efficiency calculations. There are many flavors of CAC Payback Period now. I’ll cover the traditional metric that you must master in your SaaS business. However, you should consider the Dollar-based CAC Payback […]