How To Calculate CAC in Timberline | Arithmix

If you're running a business, you've probably heard the term "CAC" thrown around. But what exactly is CAC, and why is it important to calculate it? In this article, we'll break down what CAC is, when it's valuable to calculate it, and how to do so using Timberline.

What Is CAC?

CAC stands for "customer acquisition cost." It's the amount of money you spend to acquire a new customer. This includes all the marketing and sales expenses associated with attracting and converting a lead into a paying customer.

Calculating your CAC is important because it helps you understand how much money you need to spend to acquire a new customer. This information is crucial for making informed decisions about your marketing and sales strategies, as well as for determining your overall profitability.

When Is It Valuable To Calculate CAC?

It's valuable to calculate your CAC at any stage of your business, but it's especially important when you're just starting out. When you're in the early stages of building your business, you need to know how much money you need to spend to acquire customers so you can make informed decisions about your marketing and sales strategies.

It's also valuable to calculate your CAC when you're trying out new marketing and sales strategies. By tracking your CAC over time, you can see which strategies are working and which ones aren't, and adjust your approach accordingly.

How to Calculate CAC in Timberline

To calculate your CAC in Timberline, you'll need to follow these steps:

1. Calculate your total marketing and sales expenses for a given period of time. This includes things like advertising, content creation, events, and sales commissions.
2. Divide your total marketing and sales expenses by the number of new customers you acquired during that same period of time.
3. The resulting number is your CAC.

For example, let's say you spent $10,000 on marketing and sales expenses last quarter, and you acquired 100 new customers during that same period of time. Your CAC would be $100.

It's important to note that your CAC will likely vary over time, depending on the marketing and sales strategies you're using, as well as other factors like seasonality and competition. That's why it's important to track your CAC over time and adjust your strategies accordingly.

In conclusion, calculating your CAC is an important part of running a successful business. By understanding how much money you need to spend to acquire a new customer, you can make informed decisions about your marketing and sales strategies, and ensure that you're operating at maximum profitability. And with Timberline, calculating your CAC is a breeze.

How Do You Calculate CAC in Timberline

Timberline itself isn't naturally geared towards letting you calculate complex metrics like CAC. As an alternative, teams typically use products like Arithmix to import data from Timberline and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that's powerful yet easy to use. With Arithmix you can import data from systems like Timberline, combine it with data from other systems, and create calculations like CAC.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating CAC in Arithmix

Calculating metrics like CAC is simple in Arithmix. Once you've created your free account, you'll be able to import your Timberline data, and use it to create natural language formulas for metrics like CAC.

Arithmix is designed to give you the power to build any calculations you want on top of your Timberline data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.