Customer acquisition: growing, or growing on purpose?

In an ideal world, your business’s growth is predictable, repeatable, and easily attributable to strategy.

In the real world, understanding the source of your company’s growth might be trickier than it seems. Or you might be growing in a way that’s brilliant in the short-term but creates long-term risk.

Making growth an engine you can tweak and fuel is the difference between simply acquiring more customers and building a customer acquisition strategy that can scale.

So, how do you move from growing to growing on purpose?

What repeatable customer acquisition looks like

A strong year of sales proves that demand exists for your product(s), that your pricing works, and that there is a market. However, it doesn't automatically establish which of your efforts produced the result or whether the result is sustainable.

Suppose an investor asks what happens if you double the sales budget. Are you confident it’ll produce a smooth, steady growth curve when they inject their cash? Or is the outcome untested and unpredictable?

Repeatable acquisition comes down to three fundamental conditions that help you answer that question:

1. You can attribute acquisition to specific channels: For each new customer, you can identify the channel or campaign responsible for generating the opportunity.

2. You know the unit economics by channel: You can compare customer acquisition cost, conversion rate, sales cycle, and payback period across your main acquisition channels.

3. You can reproduce the process: The steps, owners, inputs, and handoffs are defined well enough that you’re not relying on instinct.

Investors judge this separately from the size of your revenue, and they call it quality of revenue. Two companies with identical turnover and growth can be valued very differently if one has strong, documented acquisition activity and the other doesn’t.

Why customer acquisition matters to investors

Investors want to know whether growth can continue without becoming progressively more expensive or concentrated.

For example, the cloud infrastructure business CoreWeave’s revenue increased more than eightfold to $1.9 billion in 2024, but Microsoft accounted for 62% of it.

Ahead of its 2025 IPO, Reuters reported that concentration, as well as debt, led investors to question its growth prospects. The company ended up cutting its targeted valuation.

On the other side of the coin, Chime, the US digital banking platform, had a rather different story to tell investors.

In its IPO filing, it demonstrated that member referrals had been its largest source of new active members since 2022. Referrals were further 29% more likely to refer somebody else, which looked great for their growth prospects.

The two concentration risks in customer acquisition

Growth is always good news, but you can grow in a risky fashion that bites you down the line. We can break this risk down into two categories:

1. When acquisition depends on a few people

If most of your new business is attributed to you or to a couple of team members, that’s standard for the early growth stages.

The main risk here is if the individuals with the contacts and relationships leave. This also applies to other business activities – marketing, financial management, etc. But it’s particularly problematic for sales and revenue, for obvious reasons.

You can mitigate it by ensuring your processes are well-documented and repeatable. The goal is to make the capability belong to the business, rather than to the individual.

2. When revenue depends on a few customers

The second risk concerns who's paying you. If your top customer, or handful of customers, are essentially carrying your business, that can develop into a problem.

It’s not an automatic red flag. Large accounts generally cost less to serve than the same revenue scattered across many smaller clients.

However, the larger the account, the more bargaining power they naturally possess. And some might know that and use it against you on price, on payment terms, or direction.

Investors or anyone looking to buy your business will certainly consider this. A diverse mix of customers and accounts, both aged and new, is optimal.

The UK business ecosystem’s KPI problem

The ONS Management and Expectations Survey involved 53,433 businesses with 10 or more employees, scoring four separate dimensions from 0 to 1.

The lowest score of the four by some distance was the volume of KPIs tracked, with an average of 0.42. The most common explanation given was that the business simply does not have time to track anything.

“We don’t have time to track it” is uncomfortably close to “we have no idea whether a strategy is working or why.” If you create a well-oiled KPI tracking machine, it’ll make growth much more predictable and intelligible for investors or buyers down the line.

What customer acquisition costs you

Customer acquisition cost, or CAC, is your total sales and marketing spend over a period, divided by the number of new customers acquired in that period.

For example, £100,000 spent ÷ 200 new customers = £500 CAC.

Your CAC payback period is arguably more useful still because it counts how many months of gross margin you need to recoup what you spent to win a customer.

For example, if your CAC is £6,000, the average new customer pays £2,000 per month and generates £1,000 in gross profit, then your payback is 6 months.

And then there’s customer lifetime value (CLV or LTV), which estimates the gross profit a customer will generate over the whole relationship. A higher estimated CLV justifies a higher CAC.

While there are dozens of metrics you can use to track acquisition, with differences for B2B vs B2C, the big four are: