They were acquiring the wrong customers. Very efficiently.

A DTC wine subscription brand. Sommelier-curated selections, an educational brand proposition, and a strong community among core subscribers. Paid acquisition was growing fast. Churn was growing faster.

Their best customers were wine enthusiasts who wanted to learn: they stayed for years, generated high LTV, and referred friends. Casual buyers acquired through discount-led offers often churned within three months and failed to generate attractive unit economics. The paid programme was optimising toward the lowest CAC, which disproportionately attracted lower-quality casual buyers.

Stop optimising for acquisition volume and start optimising for acquisition quality. Accept a higher upfront CAC when downstream retention and LTV justified it.

Segmented the customer base by LTV cohort and worked backwards to find what high-LTV customers had in common at acquisition. High-LTV customers were disproportionately acquired through educational, curiosity-led creative rather than discount-led advertising. Stopped leading with discounts. Accepted higher acquisition costs in exchange for customers with materially better downstream economics.

• Month-6 LTV increased 67% in the new acquisition cohorts.
• Churn at month 3 dropped from 38% to 19%.
• CAC increased 22%, while payback period improved 31% due to stronger retention.
• The new acquisition cohort generated a 2.4x higher referral rate than the previous cohort.

"We were proud of our CAC number. It was the wrong number to be proud of. The efficient acquisition was filling the business with people who did not really want what we were selling." CEO, wine subscription brand