Company Context

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.

Strategic Situation

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.

Data Points

Current quarterly marketing performance

Additional facts

• Total quarterly marketing budget for next quarter is fixed at $5.5M.
• Finance requires a blended minimum LTV/CAC of 2.2x for the acquisition portfolio.
• Paid social inventory can scale up or down by 40% next quarter with no operational issue.
• Referral can likely scale only to 6,000 new customers per quarter without product changes.
• Paid search volume is constrained; management estimates at most 20% more spend can be deployed efficiently next quarter.

Deliverables

As the Head of Strategy, prepare a recommendation for the executive team:

1. Assess the current channel mix and identify whether BrightBrew is underinvesting or overinvesting in any channel.
2. Quantify the trade-off between maximizing new customer volume and maximizing long-term value.
3. Recommend a revised marketing allocation for next quarter using the available data.
4. Explain how you would use the data to influence the CMO and CFO, who have different priorities.
5. Outline how BrightBrew should validate the new strategy over the next 1-2 quarters.

Constraints

• Recommendation must be executable within one quarter.
• Total budget must remain $5.5M.
• No major brand repositioning or new product launch is allowed.
• Sales leadership expects at least 40,000 new customers next quarter.
• The CMO is resistant to cutting top-of-funnel channels unless the data case is clear.