In a recent LinkedIn post, Lee McCabe discusses a critical but often overlooked metric in business: Customer Acquisition Cost (CAC). McCabe warns that a seemingly healthy decrease in CAC can, paradoxically, signal underlying problems within a business, leading to a false sense of security.
The Deceptive Nature of a Falling CAC
McCabe highlights a common scenario where a reduction in CAC leads to complacency in business reviews. This often precedes a period where revenue fails to materialize, and sales teams struggle to close deals. He asserts that this situation is not a mystery but rather a consequence of manipulating the sales funnel.
“If you optimise hard enough for CAC, you end up buying the cheapest possible attention. Low intent, low commitment, high volume. Your spreadsheet looks lean. Your pipeline turns into sludge.”
As Lee McCabe points out, an overemphasis on lowering CAC can lead businesses to acquire leads that are cheap but ultimately unqualified. This strategy results in a spreadsheet that appears efficient but produces a stagnant sales pipeline. McCabe criticizes the common practice of defining “lead quality” as a symptom of poor engagement rather than a genuine issue with lead generation.
The Impact of Slow Response and Inconsistent Follow-Up
McCabe further argues that a decline in promptness and the number of follow-up attempts directly impacts lead quality and conversion rates. He notes the drift in response times from minutes to hours, often leaving sales teams surprised when prospects disengage.
The Importance of Proactive Engagement
According to Lee McCabe, the issue often lies in a lack of persistent engagement. He contrasts this with top performers who employ multiple touchpoints across various channels within the first day and treat follow-up as an integral part of the product or service offering, not merely an administrative task.
“So yes, the leads went cold. Because we left them outside overnight.”
This analogy powerfully illustrates how a lack of consistent nurturing can kill potential deals. McCabe emphasizes that in today’s economic climate, where marketing budgets are expected to remain flat, as indicated by Gartner’s 2025 CMO spend survey showing marketing budgets at 7.7% of revenue, businesses can no longer afford to scale inefficiencies.
“You don’t get to “scale your way out” of a broken funnel anymore. You just scale the damage.”
The Path to Sustainable Growth
Lee McCabe advocates for a more robust approach to measuring acquisition success. He suggests that the solution lies in tying acquisition efforts directly to downstream economic results. This involves tracking metrics at the source level, such as conversion to revenue, speed to lead, contact rate, close rate, gross profit, and payback periods.
In conclusion, McCabe’s analysis on LinkedIn serves as a crucial reminder for business leaders. He urges them to trust their business’s performance over potentially misleading metrics.
“If CAC looks amazing but the business feels worse, believe the business.”
This perspective underscores the need for holistic business evaluation, ensuring that efficiency gains in one area do not mask systemic problems that hinder overall growth and profitability.
📝 About This Content
This article is based on insights shared by Lee McCabe on LinkedIn.
📅 Originally posted on January 23, 2026 | View original post on LinkedIn →