Ryan Shank breaks down SaaS unit economics: 2,000 monthly dials produce 20 sales. With an SDR at $50k and AE at $100k annually, the Customer Acquisition Cost is $625 per customer. At $200 monthly revenue per customer, payback hits 3.12 months.
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Hey guys, my name is Ryan Shank. In our last video, we went over our sales funnel metrics. We went over how many dials it takes to get to a demo set, and of the demo set, how many show, and of the demos that show, how many converted to sales. So we said with 100 dials a day, which is 2,000 a month, we'll get 60 to show, we'll get 20 sales from those dials and from those demos, okay? Today, what I wanna go over is cost to acquire those 20 customers and how long it takes us to pay back our costs, okay? So to get these 20 sales, we're gonna need 2 different sales reps, an SDR, sales development rep, and an account executive. The sales development rep is dialing. They're making the dials and setting the demos. The account executive is doing these 20, or these 60 demos to get to the 20 sales. So what we need to do is we need to pay these people, okay? So let's just say for simplicity's sake, an SDR costs $50,000 annualized, okay? 50K. And an account executive costs 100K, okay? So on an annual basis, this is gonna be 150K, okay? So on a monthly basis, this is gonna cost, monthly, it's gonna cost $12,500, okay? So this is gonna be the cost right here to acquire these 20 customers. So $12,500 sales, 20, okay? So our cost per sale, we just do $12,500 divided by 20. Cost per sale, okay, is $625. So we pay for every sale $625 in cost, okay, to acquire that customer. Now, we know over here, if the average MRR per customer is $200, okay? So the revenue, revenue per sale is $200, okay? So to acquire a $200 monthly recurring revenue sale, it costs us $625. So what we need to do is we need to figure out how long does it take us to pay back the cost of that sale. So we simply take $625 divided by $200, okay? And this is gonna be our payback period. Payback period. So $625 divided by $200, this is going to be 3.12 months, okay? So it takes us 3 months to pay it back, but after that we're in the positives, okay? We're actually profiting because this, this customer right here is going to be paying us the $200 every single month. Uh, so it takes us a one-time $625 to acquire a monthly recurring revenue customer of $200 $3,200, and it's going to take us 3.12 months, a little less than 4 months, to pay back the amount of money that it takes to acquire that customer. So that's how you figure out payback period, and when you start to look at your economics, you figure out, you know, what makes the most sense for the business. So you're in the negatives for these months, but after that, you're in the positives. This is payback period and customer acquisition cost.
