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New ARR and CAC in Price-Ramped vs. Auto-Expanding Deals

Kellblog

I’ve been asked about this a few times lately, less because people value my accounting knowledge [1] but rather because people are curious about the CAC impact of such deals and how to compensate sales on them. Let’s say in this example the customer is getting the exact same value in all 3 years (e.g., Payment structure. $1M.