I’ve been noticing that many people don’t consider their customer acquisition cost (CAC) payback period and how that impacts revenue.

It’s bad for ARR when customers churn.

But let’s not forget the hidden cost of paying twice for the same seat.

Let me explain further. ↓

🤓 The Hidden Tax on Growth

Get your brain in gear, we’re about to talk numbers!

The median CAC payback period for B2B SaaS companies jumped from 14 months in 2023 to 18 months in 2024.

That’s a 29% increase in just one year.

Research that analysed over 1,000 B2B SaaS companies found that 36% of businesses identify the first 90 days as the most critical period for retention.

Companies without effective onboarding strategies see churn rates as high as 10% in month 1, though this drops to around 4% by month 3 when onboarding is done well.

💰 The Example

Let's say you acquire 100 customers at $15,000 CAC each.

Total investment = $1.5M.

If 25% churn before you hit payback, you've lost the acquisition investment on 25 customers.

Now you need to spend another $375,000 just to get back to 100 customers.

That's $1.875M spent to achieve what should have cost $1.5M.

You're paying a 25% tax on growth!

And it compounds every year.

🧪 The Project: Three Onboarding Investments That Help Protect Your CAC

Step 1. First Value

The first few days after contract signature are key.

They look for signals they made the wrong decision.

Your job in onboarding is to prove they made the right choice.

Be personal, don’t hide behind emails, include a video and create emotional investment.

Focus on helping them achieve first value as quickly as possible. Ideally, something that solves the actual problem they bought your product for.