How Amity Can Help With SaaS CAC Efficiency Cranks

November 21, 2013 Pam McBride


Reducing customer acquisition cost (CAC) is critical to the success of any SaaS business. A recent blog post by Lincoln Murphy, The SaaS Myth and Misguided Optimization, introduced the concept of SaaS CAC Efficiency – in a nutshell, it’s not so much a metric but a new SaaS CAC point of view. Optimizing CAC is not just about paying less for a customer it’s about shortening the payback period.

Lincoln identified 9 SaaS CAC Efficiency Cranks – “high-level cranks and levers that they use to scale their client’s acquisition machine”. Having the right platform can directly impact your success in achieving all 9.

As he points out – it all centers around turning rich customer insights into proactive customer engagements:

• Quickly Engage Prospects and New Customers

Customer touch data and business data should all work together like a well-oiled machine in one platform. The platform must provide capabilities that enable customer success, growth, and account managers to engage the right customer with the right information at the right time.

• Reduce Friction and Improve On-Boarding Process

With activity data, contract details, support tickets, and real-time engagement tracking, managers quickly and easily identify issues impacting a customer’s success with a given service, feature or functionality. This data, complemented with regular, personal engagement with the customer will reveal points of friction in the on-boarding process and beyond.

• Improve Engagement and Drive Prospect Investment

Only when the time-wasting manual complexity is eliminated from a customer success process, will the opportunities increase for personal engagement. It’s the personalized customer engagement that enables companies to build trust and motivate people to invest in an ongoing relationship with their service.

• Make Engagement a Measurable and Optimizable Metric

Before you can make engagement a measurable and optimizable metric, you need the right tool to foster true engagement with customers. You need to ensure that all of the engagement efforts are recorded and can be reported on – with every individual within an account and through every possible channel.

• Increase the Number of Conversions from Free to Paid

The goal is to convince prospects that your service meets their business needs and to convert them into paying customers. If you personally engaging prospects at the freemium stage then you increase the probability of conversion and establish an experience that differentiates your business.

• Reduce the time from first interaction to paid conversion

Personal engagement = reduction in time from first interaction to paid conversion.

• Improve First 90-Day Engagement and Reduce Cancellations

This defines exactly what Amity was purpose built to achieve for customer success, growth and account managers in SaaS companies – improve at the first 90-day engagement (at least). It is a single platform for day-to-day use that contains a real-time snapshot of what’s happening with accounts; a Relationship App to anticipate customer opportunities and risks; a Plan app to visually manage workflow; and a Reports App to evaluate customer and portfolio health, plus Alerts and one-click engage technology.

• Improve the Effectiveness of Existing Sales & Marketing Efforts / Spend

By anticipating customer opportunities and risks, marketing and sales efforts can be aligned with the status of the customer – you wouldn’t want to market an upsell offer to a customer on the verge of churning, would you?

• Increase Average Selling Price / Annual Contract Value on Conversions

With a comprehensive customer profile – including activity data, contract details, support tickets, and real-time engagement tracking – and trusted advisor relationships, managers can identify opportunities when they surface to grow revenue opportunities.

Of course, with a rigorous and proactive customer success program and the right tools, SaaS CAC efficiency is not the only result – reduced churn and expanded customer value can be achieved as well.


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