customer acquisition cost
also referred to as: cac
9 statements across 7 episodes · 2 bullish · 3 bearish · 7 people on the record · first statement Oct 9, 2022 by Dan Hockenmaier · across every show →
Everything said about customer acquisition cost, oldest first
Oct 9, 2022
Hockenmaier: Dual-sided ROI equations allow marketplaces to ignore balance ratios
“Actually the thing that matters is can you write an ROI equation for acquiring supply and demand, which fully internalizes the marketplace dynamic. And so what I mean by this is like, if you're acquiring a new customer, you need to Include the CAC of acquiring…”
Oct 9, 2022 bullish
Hockenmaier: Later marketplace cohorts often see lower CAC and higher LTV
“So typically, as you acquire more and more customers, you're acquiring the marginally good fit customer over time. And your CACs go up, your LTVs go down, it gets harder and harder. Marketplace actually the inverse, like the supply of liquidity is improving, t…”
Feb 19, 2023
Campbell: CAC increased 110% to 220% across software markets over 10 years
“CAC and B to B is up about a 110% over the past 10 years. Consumer it's up a 145%. If you're selling sales and marketing software, it's up 220% because there's just so much sales and marketing software doing sales and marketing things in the market.”
Mar 26, 2023 bearish
Aluwi: Theoretical Super App Benefits Like Lower CAC Often Fail in Practice
“All of the things that are really, really appealing, they will talk about, you know, lower customer acquisition costs, you know, higher attach rates to different products. Talk about, you know, higher, you know, retention across different services the ease of,…”
Jun 18, 2023 neutral
Tan: Webflow split product growth and marketing at the signup line
“Product growth is accountable for all the metrics downstream of signups. Growth marketing is accountable for signups. They're also driving or, like, have goals around CAC, their customer acquisition costs, and these are the different metrics everyone owns.”
Jun 25, 2023 negative
Batchu: Optimizing purely for low CAC attracts less valuable customers
“When you focus on CAC and reducing CAC, what tends to happen is you actually might be doing something very damaging where you're succeeding in reducing CAC, but you're actually bringing in customers that are less valuable because those are the ones that you're…”
Jun 25, 2023 negative
Batchu: Relying on LTV-to-CAC ratios risks destroying value via faulty churn assumptions
“I think the challenge with LTV to CAC, especially for a lot of, even ramp, right? It's only four years old is it's really hard to predict LTV. It's like a DCF. It's extremely assumption laden and it, and it's hard to know. You know, what the defiant value will…”
Feb 18, 2024
Nov 7, 2024 positive
Reducing Top-of-Funnel Friction Drops CAC Faster Than It Hurts LTV
“And a lot of teams get very nervous. Their retention rate went down. Their LTV went down. Oh my goodness. This is going to affect our ability to pay. No, your CAC also went down by probably more. And so now you have the ability to likely spend more. And you ha…”