Thoughts on rising CACs — challenges for organizations and online marketers, especially

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Are Customer Acquisition Costs rising, across all industries? Probably yes. But what are the reasons for it, and what can teams do to solve it?

It is one of the most posed questions that I have received in the last six months: are customer acquisition costs rising across all industries?

The short answer is, yes. Across multiple clients, I have seen that it has become increasingly difficult to keep CACs in check.

Here are some of the reasons

Meta and Google tend to “increase” CPMs YoY, naturally

Especially during the COVID pandemic, brands and companies flocked to SOM to find new customers. But, not all of them knew how to use the tools. This has led to high inefficiencies and costs for everyone.

Macro trends make a difference: During 2020–21 20% of retail happened online. This has gone back down to 12–13% in most markets

The fact that we saw an increase of nearly 2x in many industries towards online purchases, meant that a large portion of the growth resulted in new customers that COULD BE acquired

Yet, things have gone back to “normal”. And we have learned that customer behavior has not stayed the same after the stores reopened. Some of those new customers stuck around, others went back to purchasing most of their goods offline, too

Organizations aren’t set up to deal with customer relationship management online

They had their full attention on customer acquisition and execution of orders, not on retention. I see that this is a big challenge for most organizations I have come into contact with

The organizational development and focus are not on CLV optimization, and CRM, but continue to salvage trying to capture NEW customers. This is one of the largest opportunities for marketers out there, today.