How To Calculate CAC Payback in Sage 100 | Arithmix

Calculating CAC payback is an essential metric for any business that wants to understand how long it takes to recover the cost of acquiring a new customer. This metric is critical for businesses that rely on customer acquisition to grow their revenue and customer base. In this article, we will discuss what CAC payback is, when it is valuable to calculate it, and how to calculate it in Sage 100.

What Is CAC Payback?

CAC payback is a metric that measures the time it takes for a business to recover the cost of acquiring a new customer. This metric is calculated by dividing the total cost of acquiring a new customer by the revenue generated from that customer over a specific period. The resulting number is the number of months it takes to recover the cost of acquiring that customer.

For example, if it costs a business $100 to acquire a new customer, and that customer generates $50 in revenue per month, the CAC payback period would be two months. This means that it would take two months for the business to recover the cost of acquiring that customer.

When Is It Valuable To Calculate CAC Payback?

Calculating CAC payback is valuable for businesses that rely on customer acquisition to grow their revenue and customer base. This metric is particularly useful for businesses that have a high customer acquisition cost, such as those in the software or SaaS industries.

By calculating CAC payback, businesses can determine the effectiveness of their customer acquisition efforts and make informed decisions about their marketing and sales strategies. This metric can also help businesses identify areas where they can reduce their customer acquisition costs and improve their overall profitability.

How To Calculate CAC Payback in Sage 100

Calculating CAC payback in Sage 100 is a straightforward process. First, you will need to gather the following information:

• Total cost of acquiring a new customer
• Revenue generated from that customer over a specific period

Once you have this information, you can calculate CAC payback using the following formula:

CAC Payback Period = Total Cost of Acquiring a New Customer / Revenue Generated from that Customer

For example, if it costs a business $100 to acquire a new customer, and that customer generates $50 in revenue per month, the CAC payback period would be two months:

CAC Payback Period = $100 / $50 = 2 months

By calculating CAC payback in Sage 100, businesses can gain valuable insights into their customer acquisition efforts and make informed decisions about their marketing and sales strategies. This metric can help businesses optimize their customer acquisition costs and improve their overall profitability.

In conclusion, calculating CAC payback is an essential metric for any business that wants to understand the effectiveness of their customer acquisition efforts. By calculating CAC payback in Sage 100, businesses can gain valuable insights into their customer acquisition costs and make informed decisions about their marketing and sales strategies.

How Do You Calculate CAC Payback in Sage 100

Sage 100 itself isn’t naturally geared towards letting you calculate complex metrics like CAC Payback. As an alternative, teams typically use products like Arithmix to import data from Sage 100 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 Sage 100, combine it with data from other systems, and create calculations like CAC Payback.

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 Payback in Arithmix

Calculating metrics like CAC Payback is simple in Arithmix. Once you've created your free account, you’ll be able to import your Sage 100 data, and use it to create natural language formulas for metrics like CAC Payback.

Arithmix is designed to give you the power to build any calculations you want on top of your Sage 100 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.