In episode #330, Ben explains one of the most common and costly SaaS finance mistakes: failing to allocate CAC between new and existing customers. This oversight leads to misleading KPI’s, inaccurate CAC payback, flawed LTV to CAC ratios, and unreliable unit economics. Ben walks through exactly how to allocate CAC the right way, how to segment sales and marketing expenses, and why this matters for accurate revenue efficiency metrics and due diligence.

Key Topics Covered

Why fully burdened sales and marketing expenses are required for accurate CAC
The danger of pushing all sales and marketing expenses into CAC without allocation
How to allocate CAC between new customer acquisition and expansion
How to segment sales teams (hunters vs. farmers) and avoid co-mingled headcount
Allocating marketing spend based on acquisition channels
Typical allocation benchmarks for sales (60-80% to new) and marketing (80-90% to new)
Why accurate CAC is essential for CAC payback, LTV to CAC, and cost of ARR
How the Cost of ARR provides a blended benchmark without requiring allocation
Using allocation methods for businesses with multiple product lines or motions

What You’ll Learn

How to correctly calculate CAC using fully burdened sales and marketing expenses
How to evaluate marketing economics and sales efficiency with proper allocation
Why unallocated CAC leads to distorted financial strategy and misleading KPI’s
How CAC allocation flows into CAC payback period, LTV to CAC, and ARR efficiency
How to build a repeatable, defensible go-to-market metrics framework that withstands due diligence

Who This Episode Is For

SaaS founders scaling beyond early customer acquisition
CFOs, FP&A leaders, and finance teams who own KPI modeling
Operators who need accurate CAC, CAC payback, and LTV calculations
Investors or advisors assessing revenue efficiency and go-to-market economics

Related Resources

SaaS Metrics Foundation course covering CAC, LTV, ARR, and unit economics: https://www.thesaasacademy.com/the-saas-metrics-foundation
Coaching resources on building an accurate, SaaS-specific chart of accounts: https://www.thesaasacademy.com/saas-cfo-coaching

Don't Forget to Allocate Your CAC

SaaS Metrics School