For those who have performed a CAC analysis, do you do this on a GAAP or Cash Basis? The genesis for asking this question is that I provided management with a GAAP basis CAC analysis, but I am now being asked to perform the same analysis on a cash basis. So i was curious if this was an unusual ask. Thank you.
We are currently calculating on a GAAP basis, but I suppose it makes sense to look at a cash basis view if there is seasonality in S&M spend over a given year relative to the sales growth in subsequent periods. A real challenge with this calculation is truly understanding the relationship of the S&M spend and when such spend translates into new wins. We are still perfecting the time periods we are using.