October 7, 2025
Introducing the new Annual Planning dashboard in BenchmarkEngine: flexible views, benchmark comparisons, and faster insights.
SaaS customer acquisition cost (CAC) is one of the key indicators to define a profitable SaaS business model. The difference between customer acquisition cost and the lifetime value of a customer defines the value of the business.
Over the last several years, many technologies have been developed to help accelerate and automate the sales and marketing functions.
Fifteen years ago, software company financial plans followed standard guidelines about sales and marketing expense targets. Traditional software sales and marketing expense aimed for 22%-25% of revenue, maybe 28-30% if strong revenue growth warranted it. Anything north of that required a really good explanation for why and how the numbers would be reduced. SaaS financial models have thrown those benchmarks out the window.
You’ve just raised a round of financing. Your next step is to build your management team. There are several criteria hire an executive. Competency in the field, cultural fit, communication skills, management experience. All of those should be obvious. There is one that is often overlooked. Network.
I have written many posts about the importance of determining your industry size for strategic planning or investor pitch purposes. But, determining your industry size is not always easy, and more importantly, determining your total addressable market (which I will define later), is even more important and an even more nebulous calculation. So, here is everything you need to know to make sure you are correctly calculating your total addressable market and going after the biggest total addressable market you can (which will attract more investors for your business).
In 2007, when OPEXEngine launched its first benchmarking of SaaS vendors, almost no SaaS companies in the data set were selling to end-user customers through a channel. Over a decade later, that statistic has changed dramatically.
I met a seasoned executive recently. He made a bold claim. “Management is an art, and one that is overwhelmingly undervalued in Silicon Valley.” I wondered, are we investing enough in our managers?
Hiring and retaining skilled and productive employees in SaaS companies is an ongoing, competitive exercise. Human assets are the biggest investment and a huge driver of SaaS company valuations – but a lot of organizations don’t check SaaS HR benchmarks regularly or keep it in front of management the way they do customer lifetime value, retention and cost to acquire. However, when companies are preparing for IPO or being acquired, employee productivity is a critical valuation metric.
Recently, people have been asking just where are we in the SaaS valuation cycle. I last updated the chart above more than six months ago. The answer is close to ten year highs.
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