Questions

What's the average CAC value or range for a Marketplace client?

We are building a crowdsourcing marketplace, where we will have clients on one side and freelancers on the other side. Let's say we have the freelancers side under control and we don't need to acquire freelancers at the moment. What would be a regular CAC value in order to acquire clients in our platform?

3answers

I think you're looking at this the wrong way. Your customer acquisition cost is not something you should benchmark against other businesses. Without knowing more, like your short and long-term goals, it's impossible to answer.

Two companies with similar business models may have different answers to this question. A venture-backed startup trying to keep up with aggressive revenue goals may be able to stomach an astronomical CAC. A bootstrapped startup that is not seeking venture money may aim for slower growth and much lower CAC.

I suggest setting up a call with a marketing or finance expert to determine what CAC is appropriate for your company and how to get there.


Answered 5 years ago

The acquisition cost depends on the channel you will use to reach out your clients and your ability to target them.

At first, you will probably spend quite a lot in order to find the right mix for targeting and you will hopefully improve that.

What I would do is to put a small budget and test (a lot) what are the best acquisition channel and targets.

In my case, I had the opportunity to build a platform of 200 000 users just by using the right channel and targeting the right people in 9 months with no users at all at all in the beginning. We have decreased our acquisition cost by more than 50% since the launch.

But if I can add a remark, I was not focused on the cost to acquire a user, but simply to be able to acquire some. The first objective is to understand how a client is interested by your plateform (the value of your freelancers) and how much you would get out of a client and then try to optimize its acquisition process.

I'd happy to share more with you if you want.

Alexandre


Answered 5 years ago

I believe that the CAC (customer acquisition cost) is not a relevant measure for a marketplace. It is relevant for a recurring-payment SaaS product.

I suggest finding a more meaningful measure for a marketplace, e.g. Cost per Sale in Marketplace (CSM?).

Then you can measure the average sale price in the marketplace, the average commission your business takes, and go from there estimating the required cost per sale in the marketplace to make it worthwhile.

For example, if your sales transaction price in the marketplace averages to $100, and you take $5, you need to make sure that the cost of making that happen is not more than $5 (and preferably much less).

I've successfully helped over 150 entrepreneurs, startups, and businesses, and I would be happy to help you. Please send me more information before scheduling a call - so I can give you maximum value for your money. Take a look at the great reviews I’ve received: https://clarity.fm/ripul.chhabra


Answered 2 months ago

Unlock Startups Unlimited

Access 20,000+ Startup Experts, 650+ masterclass videos, 1,000+ in-depth guides, and all the software tools you need to launch and grow quickly.

Already a member? Sign in

Copyright © 2020 Startups.com LLC. All rights reserved.