The HotLine Magazine Archives
For The Profession of Cloud/SaaS Product Support
SaaS/Cloud company management teams have always recognized the economic necessity of spending a certain amount of money to acquire a customer.  Customer Acquisition Cost (CAC) is a standard part of the business plan.  What is not so readily acknowledged is that spending money to retain customers is also a necessary aspect of the new business model.  It’s unfortunately very common…

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Customer Lifetime Value is one of the essential management metrics for any SaaS/Cloud application vendor.  CLV is what remains after the CAC, Customer Acquisition Cost, and the CRC, Customer Retention Costs, are subtracted from the revenues of the relationship.  The actual duration of that relationship, therefore, is of paramount importance — far too vital to be left unattended. …

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The basic economics of the SaaS model inherently push vendors to run “lean and mean,” which requires close attention to operational profitability in every aspect of the organization.  Though the impact of that reality may be delayed by VC/investor funding, the elemental reckoning cannot be avoided forever. The cumulative effect of day to day operational profitability management will ultimately determine…

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