The Key to Lowering CAC? Margaritas
In my companies and in many friends companies, the key to unlocking growth is simple — have your customer acquisition costs (CAC) be lower than the gross margin of sales. However, this is part of startups that are often screwed up and are difficult to fix.
Many founders and agencies spend their days trying to tune Facebook ad settings and Google search parameters to optimize costs. However, this is a futile effort as internet companies are constantly increasing their ARPU and thus charging advertisers (YOU) more money to show your ads. Optimizing against this is like swimming upstream, you can do this for some time but eventually, something will break.
So what is the key to unlocking growth? You need margaritas in your marketing. Margaritas are a simple drink — tequila, lime, orange liqueur. Just like your essential marketing mix is simple — owned media (email), earned (PR and social), and paid media (ads). But just as each restaurant has its own take on the margarita, each business has its own take on its mix.
The key is figuring out your own margarita recipe. Seeing what has worked at other similar companies is a great place to start but no restaurant can be successful by just hijacking the recipes from others — they must innovate to create your own.
