CAC Crisis: Why Your Unit Economics Are Breaking (And How to Fix Them)

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Read time: 5 minutes.

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"How do I reduce CAC while maintaining growth?"

"Why is my payback period getting worse?"

"Revenue leakage is killing us - help!"

I have come across and read these panicked messages all the time.

Here's what's happening: 73% of SaaS companies saw their customer acquisition costs double in 2024 and rising in 2025, while payback periods stretched from 12 to 18+ months.

The playbooks that worked when money was free now look terrifying.

[1] Why Your Unit Economics Are Breaking

Your CAC is climbing because:

• iOS 14 killed Facebook targeting precision.

• Google ads costs increased 40% YoY.

• Cold email deliverability dropped to sub-20%.

• Content marketing is saturated across all channels.

Your payback period is stretching because:

• Customers take longer to expand usage.

• Sales cycles are 30-40% longer than pre-2023.

• Support costs eat into early-month margins.

Your revenue is leaking because:

• Failed payment churn is up 60%.

• Implementation delays push value realisation out months.

• Competitive pressure forces pricing concessions.

The result? Unit economics that worked at $2M ARR are killing you at $10M ARR.

[2] Three-Pillar Fix Framework

Pillar 1: CAC Efficiency - Stop trying to reduce costs. Start improving conversion rates.

• Audit conversion rates by traffic source over 90 days.

• A/B test landing pages with single conversion actions.

• Cut channels with >24 month payback immediately.

• Double down on channels with <9 month payback.

• Qualify harder to focus on deals most likely to close fast.

Pillar 2: Payback Period Compression - Get customers to value faster. Get them expanding sooner.

• Map your fastest time-to-value or TTV customers and reverse-engineer their path.

• Create implementation checklists that customers can self-serve.

• Set 30-60-90 day success milestones with automated check-ins.

• Identify usage patterns that predict expansion within 6 months.

• Build expansion offers directly into the product interface.

Pillar 3: Revenue Leakage Prevention - Stop money from walking out the door.

• Implement smart payment retry logic with multiple methods.

• Track usage decline patterns that predict churn 60 days early.

• Create "pause subscription" options instead of cancellation.

• Measure implementation completion rates by customer segment.

• Assign success managers to deals >$25k ARR.

[3] 90-Day Recovery Plan

Month 1: Stop the Bleeding

• Cut spending on negative ROI channels immediately.

• Implement payment retry optimisation.

• Launch churn prediction outreach campaigns.

Month 2: Improve Efficiency

• Optimise conversion rates on your best-performing channels.

• Accelerate onboarding for new customers.

• Launch expansion campaigns for usage-trigger customers.

Month 3: Scale What Works

• Double down on channels showing improved unit economics.

• Expand successful retention programs.

• Test new acquisition channels with proven playbooks.

[4] What to Track Monthly

CAC Reality Check:

• Fully-loaded CAC by channel (including sales team costs).

• Conversion rates by traffic source.

• Sales cycle length by lead source.

Payback Optimisation:

• Time from signup to first meaningful product usage.

• Expansion revenue rate by customer implementation success.

• Usage patterns that correlate with 6-month expansion.

Revenue Leakage Prevention:

• Involuntary vs. voluntary churn rates.

• Implementation completion rates by segment.

• Payment failure and retry success rates.

[5] Common Mistakes That Kill Unit Economics

CAC Calculation Errors:

• Only measuring ad spend instead of fully-loaded acquisition costs.

• Not including sales team allocation in CAC.

• Mixing new customer CAC with expansion revenue.

Revenue Leakage Blindspots:

• Not tracking involuntary churn separately from voluntary churn.

• Missing revenue impact of implementation delays.

• Underestimating support cost impact on margins.

[6] Bottom Line

Your unit economics aren't broken because the market changed.

They're broken because your systems haven't adapted to the new reality.

The companies that survive don't just cut costs, they eliminate waste and amplify what works.

• Focus on conversion rate optimisation before cost reduction.

• Compress payback periods through faster value delivery.

• Prevent revenue leakage through systems, not heroics.

Your unit economics are the foundation of your business. Fix them now or watch competitors eat your market share.

That's it for today's article! I hope you found this essay insightful.

Wishing you a productive week ahead!

I always appreciate you reading.

Thanks,
Chintankumar Maisuria