Customer Acquisition Cost is changing
Has the cost of acquiring new customers been changing for your business over the last 18 months? We took the data from some of our clients to see if there is a trend happening here and see what we could learn from that trend.
- On average, CAC declined 58.5% from Q4 of 2019 vs. Q2 of 2020 (Peak of COVID)
- CAC has increased 91% from its bottom in Q2 2020 to Q1 2021 and just over 187% YoY Q2 2020 vs. Q2 2021
- Revenue/Ad Spend has declined 68% from Q2 2020 vs. Q2 2021
At Stage 1 Financial, it is our opinion that this is happening for the following reasons:
- IOS and other privacy changes have impacted efficiency
- More spend following the stay-at-home period such as travel & entertainment
- Brick-and-mortar volumes replacing online sales
This is a small sample size, but there is still value in seeing what is happening for some businesses right now. Keep in mind that just because some companies are performing a certain way doesn’t mean yours has to. We believe that this trend will continue through the winter or longer.
We recommend that you review where your CAC is at to see if it has its own trend that may need to be addressed. We also recommend that you strive for an omnichannel approach to avoid carrying all your eggs in one basket.