Spending more to acquire customers makes sense if they're worth more over their lifetime. A customer with $5,000 lifetime value and $500 acquisition cost beats one costing $200 to acquire but only worth $1,000 total. Focus on the ratio, not the price tag.
What every business owner wants is they want cheaper customers, and it's usually the last thing they really need. They really need a better model so they can afford more expensive leads. So let's say scenario 1, LTV $5,000, CAC $500. Scenario 2, LTV $1,000, CAC $200. Which business would you rather have? Well, if you just said, hey, I want cheaper customers, then you'd say this. But does that make sense? No, because you're getting 5 to 1. Wouldn't you rather put $500 in and get $5,000 back? Because now you're getting 10 to 1, even though it costs you more than twice as much to get a customer.
