Customer Acquisition Cost Optimization Strategy

Customer Acquisition Cost Optimization Strategy for NutriBlend

Current CAC Analysis

NutriBlend’s overall CAC of $42 is slightly above the DTC food supplement industry benchmark of $35-40. Breaking down by channel:

• Instagram/Facebook ads: $52 CAC (29% above benchmark)
• Google Search: $38 CAC (on par with benchmark)
• Email marketing: $21 CAC (32% below benchmark)
• Influencer partnerships: $61 CAC (17% above benchmark)

With your current customer LTV of $210, your LTV

ratio is 5:1, which is healthy but has room for improvement, particularly for your premium subscription customers where we should target a 7:1 ratio.

CAC Calculation Framework

Implement this enhanced calculation methodology to ensure accurate CAC measurement:

1. Attribution Model Refinement
   • Move from last-click to multi-touch attribution with these channel weights:
     • First touch: 30%
     • Nurturing touches: 30%
     • Last touch: 40%
   • Implement 60-day attribution window to capture longer consideration cycles
2. True Cost Incorporation
   • Add currently unmeasured costs:
     • Agency fees allocated by channel (estimated $8,500/month)
     • Creative production costs ($4,200/month)
     • Team time allocation (15% of marketing salaries)

CAC Optimization Strategies

1. Funnel Optimization (Estimated 15-20% CAC reduction)

• Add social proof elements to product landing pages (case studies from crossfit athletes)
• Implement exit-intent offers with 15% discount for first-time purchases
• Reduce checkout form fields from 12 to 5 essential fields
• Add bundle options to increase AOV by an estimated 22%

2. Targeting Refinement (Estimated 12-18% CAC reduction)

• Refine Facebook audience targeting:
  • Exclude previous purchasers from acquisition campaigns
  • Create lookalike audiences from top 10% of customers by LTV
  • Focus on 28-42 age range where conversion rates are 2.3x higher
• Google Search:
  • Increase bids on high-intent keywords (“organic protein powder subscription”)
  • Reduce spend on generic terms (“protein supplements”)

3. Channel Reallocation (Estimated 10-15% CAC reduction)

• Shift 35% of influencer budget to email marketing automation
• Increase SMS marketing budget by $5,500/month
• Reduce Facebook prospecting campaigns by 20%, reinvest in retargeting

4. Conversion Rate Improvement (Estimated 18-25% CAC reduction)

• Implement pre-populated quiz for personalized product recommendations
• Add live nutrition coach chat during peak shopping hours
• Create urgency with limited-time subscription bonuses
• Develop segment-specific landing pages for crossfit, yoga, and weightlifting audiences

Implementation Roadmap & Success Metrics

Phase 1 (Weeks 1-4): Measurement Infrastructure

• Implement enhanced attribution model
• Set up segment-specific tracking
• Establish channel-level CAC dashboards

Phase 2 (Weeks 5-8): Quick Wins

• Landing page optimizations
• Checkout flow improvements
• Campaign targeting adjustments

Phase 3 (Weeks 9-16): Strategic Shifts

• Channel budget reallocation
• New creative development
• Segment-specific campaign launches

Success Metrics:

• Primary: Reduce overall CAC by 20% within 90 days
• Secondary: Maintain or increase conversion quality (measure by 30-day retention)
• Supporting: Improve landing page conversion rate by 35%
• Long-term: Achieve 7:1 LTV
  ratio for premium subscription segment