One of the freshest and most often used buzz-words in sales and marketing is customer acquisition cost (or CAC), but are CAC and other cost-per metrics actually reflective of the health of a company? Mike and Doug discuss how salespeople and marketers' obsession with cost might hurt more than it helps.
Everyone is obsessed with customer acquisition cost (CAC) and other cost-per metrics. It's all about efficiency. However, the sales and marketing VP's of old were focused on revenue and revenue growth. This begs an interesting question: why are so many companies focused on cutting their costs as opposed to growing their revenue? One answer may be simple. The companies obsessing over customer acquisition cost, cost-per-lead, and other cost metrics can't talk about revenue and profit because they aren't profitable.
The case may be that small to mid-market businesses aren't spending enough on customer acquisition. This might come from a lack of funds. "Thought leaders" going around telling everyone to lower their CAC causes businesses to underspend when it comes to acquiring customers. As the old adage goes, "you need to spend money to make money."