BrightBrew is a direct-to-consumer coffee subscription brand selling whole-bean coffee, cold brew kits, and brewing accessories in the U.S. The company generated $48M in revenue last year, with 65% from subscriptions and the rest from one-time ecommerce purchases. BrightBrew has grown quickly through paid social, influencer partnerships, search, and email, but CAC has risen for three consecutive quarters. You are the Head of Strategy, and the CMO wants to know whether BrightBrew should materially reallocate marketing spend ahead of the holiday season.
Historically, BrightBrew has spent heavily on Meta and influencer marketing because those channels drove the highest top-of-funnel volume. However, finance is concerned that these channels may be over-attributed and less profitable than they appear. A recent customer-level analysis suggests that customers acquired through search and referral have meaningfully higher retention and average order value. The executive team must decide whether to keep the current acquisition mix or shift budget toward higher-LTV channels, even if near-term new customer growth slows.
| Channel | Quarterly Spend | New Customers | CAC | 12-Month Gross Margin LTV | LTV/CAC | 90-Day Retention |
|---|---|---|---|---|---|---|
| Paid Social | $2.4M | 24,000 | $100 | $180 | 1.8x | 42% |
| Influencer | $1.2M | 10,000 | $120 | $210 | 1.75x | 45% |
| Paid Search | $1.0M | 7,100 | $141 | $320 | 2.27x | 61% |
| Referral | $0.4M | 4,000 | $100 | $360 | 3.6x | 68% |
| Email/reactivation | $0.2M | 2,500 | $80 | $250 | 3.13x | 58% |
As the Head of Strategy, prepare a recommendation for the executive team: