Topic: General Posts

Subject: Customer Acquisition Cost (CAC)
Joseph Tarzia
Member: 2017
Submitted on 10-11-17 10:30 am

For those who have performed a CAC analysis, do you do this on a GAAP or Cash Basis?  The genesis for asking this question is that I provided management with a GAAP basis CAC analysis, but I am now being asked to perform the same analysis on a cash basis.  So i was curious if this was an unusual ask.  Thank you.

Chris Honeycutt
Member: 2014
Posts: 2

Subject: Re:Customer Acquisition Cost (CAC)

Submitted on 10-11-17 2:24 pm.

We are currently calculating on a GAAP basis, but I suppose it makes sense to look at a cash basis view if there is seasonality in S&M spend over a given year relative to the sales growth in subsequent periods.  A real challenge with this calculation is truly understanding the relationship of the S&M spend and when such spend translates into new wins.  We are still perfecting the time periods we are using.