Knowing your CAC (Customer Acquisition Costs) isn’t enough

Today I discovered a great overview on Customer Acquisition Costs (CAC) by Narbe Alexandrian. He definitely hits the nail on the head in terms of the need to know these costs if you want to accelerate your start-up or simply run your business in a responsible manner.

But knowing your CAC isn’t enough

All businesses run various campaigns and initiatives to acquire customers across many channels. To be a true growth hacker, you must know your CAC on a channel basis — or if you can, on a campaign basis.

As in web analytics and marketing communications, “Segment, segment, segment”. Knowing a blended CAC tells you if you are net positive or in a generally healthy state but it hides too much.

Further, how actionable is knowing a blended rate? Perhaps your CAC is terrible due to too many media buys? Maybe your CPC for one campaign is ridiculous? It pays to know — almost literally.

Double down on your low CAC channels

While cutting back on high CAC channels is obvious, you have to remember to double-down on your winners. If you are finding efforts that have really low CAC — focus there, and remember to keep an eye on your retention! Bringing in customers cheaply is great, but keeping them is divine.

Happy hacking!

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