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  • Writer's pictureAndy Hamer

The Hidden Costs of Running a SaaS Business: Why You Need to Know Your Cost of Sale

In today's world, many business owners do not fully understand the cost of sale for a B2B SaaS solution, which can significantly impact the success of a SaaS business. Cost of sale refers to the expenses associated with acquiring and generating revenue from new customers. It includes various factors such as marketing expenses, sales team compensation, other team members' compensation, sales tools and technology, onboarding and training costs, infrastructure and hosting costs, payment processing fees, and renewal and customer retention costs.



I believe "not knowing how much it costs to acquire clients means you don't understand it’s cheaper to retain than acquire new ones and the true cost of churn in lost revenue and extra costs to replace them."


To effectively manage and optimize the cost of sales, SaaS businesses must carefully measure and analyse each of these costs and continually look for ways to reduce expenses without compromising the quality of their product or customer experience. Understanding the cost of sale is essential for SaaS businesses, as retaining existing customers is cheaper than acquiring new ones.


During a recent lunch with my son, we discussed how understanding the cost of sale is critical for the success of a SaaS business. His technology services company struggled to analyse the cost of serving clients and determine which ones were profitable and which were not. They created a Power BI dashboard for the entire sales team to address this problem. Using the dashboard, they can now make data-driven decisions that will ultimately lead to better business outcomes.



SaaS businesses need to invest in tools that enable them to analyse the cost of sale and make informed decisions. Not knowing how much it costs to acquire clients means you need to understand it's cheaper to retain than acquire new ones and the true cost of churn in lost revenue and extra costs to replace them.


I offer a free 60-minute discovery session to discuss your cost of sale and provide actionable advice to optimize it.

Contact me and schedule your free discovery session to take advantage of this offer.

By taking this step, you will be on your way to optimizing your cost of sale and achieving success in your SaaS business.

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