ANNUAL PLANNING IMPERATIVE: CAC RATIOS

Summary from the TLDR Marketing newsletter

The cost of acquiring customers has risen due to longer sales cycles and smaller deal sizes, making CAC ratios essential for accurate budget planning. Two key CAC ratios — one blending new and expansion ARR and one focused solely on new ARR — can help forecast budgets more effectively. This method provides better insight than payback periods for determining the budget needed to hit revenue goals.