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Our CAC is Way Too High. Should We Cut and Marketing To The Bone?
- When facing high CAC, cutting sales and marketing is usually not the best solution unless running out of cash.
- High CAC is a symptom of underlying issues like high churn, inefficient channels, or misalignment with target customers.
- Sales and marketing are vital for business survival; cutting them drastically can harm the business in the long run.
- Reallocating budget strategically is advised, focusing on effective initiatives and shifting to lower-cost channels.
- Fixing the product incrementally while maintaining sales and marketing efforts can lead to improvements.
- Transparency with the team and board, presenting clear strategies to optimize spend and improve the product, is essential.
- Spending more to combat slowing growth without addressing root causes is not a sustainable solution.
- Set a fixed budget for sales and marketing, prioritize what works, and invest in product upgrades to address underlying issues.
- Continuous optimization, thoughtful reallocation of resources, and gradual product improvement are key to addressing high CAC.
- Focus on what works, even marginally, and gradually upgrade the product while maintaining a balanced approach in marketing.
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