Strategy
CAC is a system metric, not a channel metric
Why optimising each channel in isolation quietly raises your blended acquisition cost, and what to measure instead.
Every channel manager wants their CAC to look good. The problem is that the cheapest-looking channels often harvest demand that other channels created. Optimise each channel in isolation and you can make every individual report look better while the business pays more for each customer.
The illusion of channel efficiency
Brand search and retargeting almost always report the lowest CAC. That is because they reach people who already intended to buy. Cut the upper-funnel activity that created that intent and, a few weeks later, those 'efficient' channels quietly shrink.
What to measure instead
- Blended CAC: total acquisition cost divided by total new customers
- CAC payback period by cohort
- Incremental lift from holdout or geo tests
- New-customer revenue share by channel
Making the shift
Start by reporting blended CAC alongside channel metrics in the same dashboard. Then run one incrementality test per quarter on your largest channel. Within two quarters, budget conversations change from 'which channel looks best' to 'which dollar creates the most new customers'.
The goal is not cheap clicks. The goal is profitable customers, at scale, for as long as possible.