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Houston: we have a CAC problem
Jay Nathan & Jeff Breunsbach
June 26, 2024
The Middle from GrowthCurve.io
Three ideas to level up your week.
Hey Reader,
Welcome to The Middle, your midweek rundown of the most interesting things we've read this week.
No time for dilly-dallying; let's get into it...
Jeff
Today’s Newsletter is brought to you by Mayple.
"Customers churn when they don't know how to use the platform effectively."
“Lacking the knowledge and manpower, customers fail to see ROI and eventually leave.”
Sound familiar?
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Houston: We Have a CAC Problem
A single graph in Jamin Ball’s Clouded Judgement newsletter caught my attention.
It underscores the tough road ahead for many SaaS companies:
Credit: Jamin Ball - Clouded Judgement
To succeed, software companies must acquire customers at scale. Then, they should be retained long enough to pay back the selling costs and become profitable.
Best-in-class companies recoup their selling costs in as little as 12-18 months.
Notice the trend above: Median CAC Payback is 38 months.
Can you believe that: 3+ years to BREAK EVEN.
Everyone’s job just got harder.
Multi-touch is the way to go
Brendan Short discussed outbound and the idea that teams need to become more comfortable with a multi-touch approach.
No surprise that when you thread multi-channel sequences together, users are more likely to book a meeting.
Often, it's not effective to tell our prospects (or customers) something only once. It needs to be repeated through multiple channels.
Don't rely on automation; ensure you involve your teams to build relationships that can translate into business.
Prompt: Create a customer journey map that identifies key touchpoints and aligns them with delivered value for a SaaS business.
How It Helps: Use ChatGPT to develop a comprehensive customer journey map highlighting essential touchpoints and the value provided at each stage. This helps understand the customer experience and optimize each interaction to enhance satisfaction and retention.
Example Prompt Structure:
Develop a detailed customer journey map for a SaaS business. Identify key touchpoints such as awareness, consideration, onboarding, first use, adoption, renewal, and advocacy. For each touchpoint, outline the specific value delivered to the customer. Include examples of actions or interactions at each stage that contribute to customer satisfaction and loyalty.
If your team is using AI in your day-to-day work, press reply with a specific tool or prompt that you use so we can highlight you.
Surfing in the chaos
“Curiosity” is a trait that companies seek out in our co-workers.
(Don’t believe me? Go read a few job descriptions.)
But how can you identify curiosity?
Anne-Laure Le Cunff, a PhD researcher, shares the 9 curiosity habits of systematically curious people.
Here are two that stood out to me:
3. Asking generative questions.
For curious minds, every interaction is an opportunity to learn. Exchanging generative questions is one of their favorite modes of communication. They not only ask about facts, but also about feelings, underlying motivations, and cultural context. Their questions are open-ended, multidimensional, and empathetic. Some of them even keep a list of their favorite questions.
Customers are more aware of the total experience that surrounds a product.
They want strong business partners, not just a technology vendor.
Build teams that aren’t afraid to ask tough, necessary questions that can lead to strong relationships.
It gets you moving towards business partners and away from vendors.
9. Welcoming the unpredictable.
For curious minds, the fact that the world keeps on changing is a feature, not a bug. They believe that their response determines how much disruptions affect them, and they choose to respond with curiosity. They surf with chaos to not only survive, but to thrive in chaotic times.
SaaS is anything but predictable. Look at the last 4-5 years as evidence.
This constant variability requires a person who can be comfortable in the uncomfortable. It’s not for everyone.
Build teams that approach change with an open mind.
And that see themselves Surfing In The Chaos.
 Jeff Breunsbach |  Jay Nathan |
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