The blended CAC is £300. The next customer costs £700.

Averaging acquisition cost across channels produces a number that describes the customers you already have, and misprices every one you plan to add.

By Steve 5 min read
Abstract bridge artwork for The blended CAC is £300. The next customer costs £700.

A growth plan that reads “we acquired 400 customers at £300 each, so another £240,000 buys 800 more” is doing arithmetic on a number that does not behave that way. Blended customer acquisition cost is an average. Spending decisions are marginal. The gap between the two is not a rounding error, in most businesses that have been acquiring for a few years, the marginal cost of the next customer is a multiple of the average cost of the last hundred. This is not a measurement failure. The blended figure is…

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