Growth Without Buying Revenue at Any Cost
A DTC brand was growing revenue but losing profitability to rising CAC. By shifting focus from platform ROAS to customer cohorts and lifecycle marketing, they improved paid margin by 32%.
The Situation
A direct-to-consumer brand had experienced rapid growth through paid social. Revenue was increasing. Profitability was not. Customer acquisition costs were rising, creative performance was deteriorating and the company had become increasingly dependent on new-customer acquisition.
The Findings
The marketing team was optimizing primarily around platform-reported ROAS. That obscured several larger issues:
The Approach
The strategy shifted the business from channel optimization toward customer economics. Work included:
The Outcomes
Blended CAC declined 24%
90-day repeat purchase rate increased 19%
Contribution margin from paid acquisition improved 32%
Dependence on the largest paid channel declined from 78% to 55% of acquisition spend
Revenue continued growing while marketing efficiency improved
The Lesson
"Revenue growth is not the same thing as healthy growth. Marketing should be accountable to the economics of the business."
Representative engagement: Identifying details have been anonymized. Metrics may be rounded or masked to protect confidentiality.