How should I calculate the “cost of acquisition” of a SaaS product that is still an idea and is not regenerating any revenue yet?

You can sort of half test it via paid spend. This is a good exercise to do.

Budget $500 to spend on Adwords and Facebook marketing. Do multiple campaigns and drive them to a simple landing page. And see if you can even afford the traffic at all.

Then come up with a theoretical conversion model to paid customers as a % of the traffic you drive to this landing page.

You’ll likely find Adwords is way too expensive, and Facebook too difficult to convert. If not, though, then you’re on to something. If so, paid acquisition may not work well for you in the early days.

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Published on June 5, 2018

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