CEO: “Please send me the CAC by channel” This type of question signals a company that is data-rich but insight-poor. And for my marketers out there, here's how to change that: EXAMPLE: Paid Search Let’s say you’re in the market for a sales CRM for your organization. You’ve been tasked with researching options, so you go to Google and type in “best sales CRM.” At the top, you get two “sponsored” results - Company A and Company B Let’s say those two have been going back and forth between ranking in the first and second spots, so they’re spending the same amount over a given time period Further, they have the same exact landing page - copy, testimonials, CTA, + more. All things considered, everything is the same between them So which company wins your business here? 💡 The company that leverages *other* variables outside of paid search to their benefit Let’s now give names to Company A and Company B above Company A is Hubspot Company B is Jobber (sorry Jobber, you were the first CRM company I came across and had never heard of) Knowing these are the two companies, which ad are you clicking on? If I had to bet, I’d put my money on Hubspot Why? Because they have stronger brand awareness + you’ve probably heard of them before. They’re familiar + more trustworthy as a result (and feel less risky). So back to looking at the CAC of "paid search" for each of those companies, despite having the same exact spend, same landing pages, same content, same offer, etc., that channel is going to be more effective for Hubspot Same spend on paid search But more clicks And more conversions The ironic part is that they will have a lower CAC if you’re looking specifically at that channel, but it actually has NOTHING to do with that channel --> It has EVERYTHING to do with the interplay between that channel and the other channels they’re leveraging ------> It has EVERYTHING to do with viewing your demand gen ecosystem as a series of force multipliers upon one another The clients I've worked with who understood this often saw anywhere from a 50-200% increase in qualified pipeline within 12 months of embracing this demand gen marketing philosophy If this scenario sounds like your company or if you're in B2B trying to figure out how to keep the growth going, I have room for 1 more client before I'm booked up until 2027
That's true. And its why I don't like a single CAC-by-channel number. When I join ad data with the CRM for attribution, Id show channel CAC next to blended CAC. That way a channel that looks cheap because brand is doing the work doesn't get all the credit.
Sam Kuehnle Budgets get poured into Search until CPAs blow out. How do you convince them to fund brand first?
CAC by channel is fiction. Even if you could measure it accurately, it would still lead to the wrong decisions. Reports can't show how investments that look unprofitable make everything else work. That takes human judgment.
Usually the CEO is not really asking for CAC by channel. They want to know where the next dollar should go. For example, pairing the channel view with a required "How did you hear about us?" field on the demo form can surface the podcast, peer referral, or LinkedIn post that paid search is getting credit for. That answer is messier, and much closer to how people actually buy.
This is where channel-level CAC can become misleading. If someone has already seen the brand through content, referrals, events, or other touchpoints, the paid search click is arriving with a very different level of trust than it would for an unknown company. The tricky part for RevOps is making sure the reporting captures those interactions instead of giving one channel credit for demand that several channels helped create.
Paid search gets the invoice, brand did the work three years earlier. CAC by channel is how you end up cutting the part that actually sells.
Look for correlation - did leads and pipeline go up when you turned XY channel on, did it go down when you turn it off? that's your first best clue.
In other words, a strong brand recognition drives down your CAC, and you shouldn't kill demand gen just because attribution can't cleanly show it. I think another issue related to this is how to measure better. Which is the whole case for measuring influenced pipeline instead of last-click for paid campaigns.
💯 And it's so frustrating to see smaller, not-default-choice companies go with cookie-cutter ad and landing page copy (or send traffic to completely context-less demo pages), effectively ignoring opportunities to build more context around their product. I had to google Jobber, but yeah... Don't see HubSpot working for field service orgs all that well.
I've never thought of this from this angle. But lately I've been wondering if any attribution, or even influence by channel, makes sense to put a number on. Intuitively we know that in the best case scenario, people have seen your ads or interacted with you on many different channels so they know you and consider you. So IRL the influence could look like fx. 20% LinkedIn, 20% webinar, 20% Google search, 20% website and 20% sales call. Attribution/CAC per channel makes no sense.