At this point in time, customer acquisition is unquestionably the hottest topic of conversation in DTC and E-commerce. There is a good reason for this: Facebook ads have been performing poorly since 2021, search advertising costs are rising quickly, social media is oversaturated, and coming AI has the capacity to make things much worse. Many businesses simply no longer know where to find customers at an affordable cost.
Solving the customer acquisition problem is not really what we do here at Capacify, but indirectly, improving your operations has a huge underappreciated effect on marketing. For example:
- Operational excellence raises the customer LTV (lifetime value) because it leads to happy customers who order again and again. A higher LTV means that a higher CAC (customer acquisition cost) is viable.
- Companies that have operational excellence do not have to focus on operational headaches and emergencies and can instead shift their focus to marketing.
- Operational excellence improves word-of-mouth marketing while bad operational execution leads to bad customer experiences that hamper marketing efforts.
- Operational excellence increases efficiency and frees up money that can be shifted to marketing.
There are three primary components to DTC: product, marketing, and operations. Over the past decade, marketing has ruled the day, but as many struggling businesses are now finding out, you can’t throw a mediocre me-too product in the market and expect to win long-term. Nor will clever marketing overcome bad operations. The internet is littered with clever social influencers who have learned the hard way that operations are important. If you want a legitimate business, you have to run a legitimate business.
At Capacify, we recognize that your product matters. It is arguably the most important thing in your business. We know that your marketing matters a lot too. But, a focus on operations can drastically improve your marketing efforts. Operational excellence is a gift that keeps giving.
