Zero CAC is the best festival gift

As the festival season – and end of the year – is upon us having a zero Customer Acquisition Cost is the gift that founders, CEOs and CMOs crave. But sadly it is often a mirage.

The Perfect Product

It’s a common belief that if your product is good, it will sell itself. You know, a kid grows up with Amul ghee and proceeds to buy the same when they start their own household. Nice. Till maybe a Two Brothers shows up and dangles A2 Gir Bilona hand-churned-in-the morning ghee in front of them…Oh wait, that wasn’t how the story was supposed to go!

I hear this “Build It and They Will Come” mostly from founders who feel uncomfortable putting money into marketing. Unlike a product where you control all aspects of the input to outcome, in marketing there are so many variables that could result in sub-optimal use of that precious investment! So there is fear, and rightly so.

This myth is relevant to your personal brand too – no matter how awesome you are, you have to tell your story correctly and to the right audience. And it’s not just on LinkedIn. More on that in the rest of this newsletter.

Am I selling Rolex to a Timepass?

The first challenge in today’s world is to find your audience. In the physical world this was sort of easy – plonk your store in the right mall or neighborhood and you’d reach the right people. On digital – much harder.

I might be a fan and read all about the virtues of the Rolex Land Dweller, Sea Dweller or Sky Dweller but just not want to shell out even Rs 5L for a Rolex Oyster Perpetual. Bummer for the marketer who paid for the ads to chase me!

Unless I am able to merge your interests with recent data on your spend pattern and purchases, a lot of my communication efforts will be wasted.

It’s further complicated by the fact that multiple consumers reside in one household and perhaps rely on one person to bankroll their expenses – you have to then figure out who is the actual buyer. Is that fancy Birdsong Whipped Soap for the Mother or The Teen?

Tools like Razorpay Engage do exist to help with the targeting, so your first step to zero CAC would be to finetune where to find your customers.

You’ve found me, now persuade me

Finding a customer is hard enough, but conversion? I’ve been using Ferns n Petals (FNP) to send flowers for birthdays for years. I buy flowers for the home at the nearby flower shops. This year a lot of new flower companies are targeting me on Facebook and Instagram.

The flowers look lovely and I scroll through the beautiful photos. But unlike Two Brothers who convinced me that their wheat is better because it is an ancient grain (Emmer) with more fiber and low glycaemic index, the flower companies have so far failed to persuade me to switch. What could they do better?

The Six Pillars of Persuasion 

There’s something called a “category heuristic”. Which is what you really care about in that particular category. For example the new iPhone 17 has a lot of fancy tech, but in communication they really focus on the camera features and video playback duration because that is what most customers care about.  To be successful you have to own a superlative – best, oldest, largest etc – in that heuristic.

In the case of a gift bouquet, bigger is a key metric for me. A brand called Farmerr is trying to be cutesy there with options like Rational (10 stems), Appropriate (15 stems) and Proper (20 stems), but that’s not helping me to see how impressive the bouquet would be.  If you told me the diameter ranged from 30 cms to 60 cms that would be the clincher.

It also helps if someone in authority says that your product is awesome, preferably in that particular heuristic.  If the retired head of Rashtrapati Bhavan’s Horticulture Department told me that the flowers were fresh or fragrant or large, I’d be more trusting of the claim. 

How about social proof? If a lot of people have given positive reviews that gives me more confidence to try something new.

Building a persuasion stack is the single biggest investment you can make for your brand. Take a look at the checklist I made here. 

This works for personal branding too – take a look at your LinkedIn profile and see how much you are able to tick!

Doesn’t price matter?

It does, always. But not necessarily the lowest price. A Rolex and a Timex are functionally watches but deliver two entirely different value propositions.

An iPhone is frankly an anachronism in terms of the name – it should be an iCamera or iVideo because that is really what you are now buying. A device to make phone calls is waaay cheaper.

A builder selling by square feet is never going to have the same price point as one who designs you a lifestyle.

From Scarcity to Abundance

In one generation we’ve gone from single product/single brand in most categories to a vast range of choices. We have to educate our customers on how to choose the right fit for themselves.

Enjoy the festive season!

Oh and I’m looking forward to hosting my first CMO Roundtable after relocating back from Singapore 🙂 I’m cohosting with Apuarv Sethi SVP Marketing for Razorpay on September 23rd in Bangalore.