Table OF Content
- What is B2B SaaS Customer Acquisition Cost?
- CAC in B2B Marketing
- 5 Tips to Reduce CAC in B2B Marketing
- Segment and Target the Right Leads
- Don’t Sleep on Sales and Marketing Automation
- Minimize Paid Advertisements
- Optimize Your Content Marketing Efforts
- Always A/B Test
- Keep an Eye on Your B2B SaaS Customer Acquisition Cost
Acquiring customers is expensive. Especially when you’re a B2B SaaS company. Why? Because you deal with more sophisticated buyers who go through multiple stages in the sales pipeline before making a decision.
Optimizing the website, content marketing, display advertisements, and marketing and sales automation are just some of the expenses you need to bear to acquire customers, racking up your customer acquisition cost.
What is B2B SaaS Customer Acquisition Cost?
Customer Acquisition Cost (CAC) is a key metric for B2B SaaS companies. It helps you understand how much it costs to acquire a new customer and whether the value of that customer justifies those costs.
Simply put, CAC tells you how much money you spend to get someone to buy your product.
To calculate CAC for SaaS, all you need to do is divide your total sales and marketing expenses by the number of new customers you acquired over a certain period. For example, if you spend $100,000 on marketing and sales and acquired 100 new customers, your CAC would be $1,000.
This means to acquire one customer, you need to spend $1,000.
CAC in B2B Marketing
People usually associate customer acquisition cost with investors or C-level executives. But it is also one of the key KPIs in B2B SaaS marketing. After all, your marketing campaigns drive customers to your brand.
CAC in B2B marketing helps you understand the impact of your marketing campaigns and determine if the costs you’re bearing are acquiring new customers optimally.
For example, if you’re spending a lot more on marketing campaigns but not acquiring as many customers, you might have to reevaluate your marketing strategy and cut costs where required. Simple, isn’t it? But there’s just one problem.
To acquire more customers, you must also spend more. So how do you decide where you can cut costs? And if you do, how will it impact the future demand for your brand?
To simplify it for you, here are our top tips that you can use to reduce CAC in B2B marketing and sales management wisely.
5 Tips to Reduce CAC in B2B Marketing
1. Segment and Target the Right Leads
Not all leads will convert into customers. So it’s important to identify the ones that will. You can easily do this by tracking their actions on your website or examining how they respond to your marketing campaigns and matching them with your buyer’s persona and ICP.
Once you have a list of prospects genuinely interested in your product and will benefit from it, it becomes easier to direct your marketing efforts toward them.
For example, you can create hyper-personalized content and build a lead-scoring model to determine if they can be moved further down the sales funnel. This way, you won’t spend money on acquiring customers who don’t intend to make a purchase. As a bonus, you’ll also create a solid and healthy sales pipeline.
2. Don’t Sleep on Sales and Marketing Automation
B2B SaaS companies have long sales cycles and complex sales processes. Using marketing and sales automation tools will reduce human interference and bring efficiency to the process, reducing the time, resources, and money you need to acquire new customers.
Here are some automation tools you can use-
- Email automation to set triggers and launch personalized emails. For example, MailChimp and Drip.
- Marketing Enablement or CRM software to manage your pipeline end-to-end. For example, HubSpot and Pipedrive.
- Social selling tools to engage with prospects on social platforms. For example, BuzzSumo and HootSuite.
- Prospecting automation to find new leads and keep them engaged. For example, LinkedIn’s Sales Navigator.
3. Minimize Paid Advertisements
Running paid advertisements is an effective way to drive traffic and generate new leads. But it can also be expensive, especially if you’re targeting a niche audience or using premium ad platforms. Moreover, if your SaaS marketing strategy heavily depends on paid ads, you might struggle to reduce your customer acquisition cost.
Instead, consider investing in owned and earned media. For example, your website, blogs, whitepapers, others writing about your company or linking to your blog posts, etc. Remember, paid ads are still important, but you must also consider other channels in your SaaS marketing mix.
4. Optimize Your Content Marketing Efforts
When it comes to reaping the benefits of content marketing, SaaS and technology are the two top B2B industries in the lead. But while its initial setup is more expensive than paid advertisements, it’ll significantly reduce your CAC in the long term.
In fact, nearly half of marketers say that ‘old’ blog posts drive 61-80% of their organic website traffic.
Besides producing consistent, high-quality content, you must also focus on SEO to rank higher on Google. This will lower your CAC, boost lead generation, and add credibility to your brand.
5. Always A/B Test
A/B testing must be a default in your B2B SaaS marketing strategy. How else will you know what works and what doesn’t? It’s also a great way to identify areas for cutting costs to reduce CAC.
For example, you can A/B test new landing pages on your website, emails, forms, CTAs, website navigation, content, trial processes, etc. This way, if something isn’t working, you can either optimize it or scrap it off your marketing strategy. It helps you make data-driven decisions to optimize your marketing efforts and reduce CAC.
Keep an Eye on Your B2B SaaS Customer Acquisition Cost
As a B2B SaaS marketer, reducing your CAC must be a top priority, as it can significantly impact the growth and profitability of your company. ‘Spending more to make more’ is a viable concept, but it can only take you so far. Therefore, you must create your marketing strategy effectively to ensure high customer acquisition at low customer acquisition costs.