CEO Corner: Acquisition Cost is the New Tax: And It’s Killing Growth

Every business leader knows the dread of taxes. No matter how efficient your operations, no matter how good your quarter looks, the bill always comes due.

In commerce today, customer acquisition cost (CAC) has become the same thing. It’s the unavoidable tax of digital business, and every year, the rate goes up.

And unlike your accountant, Google and Meta don’t help you find deductions.

The Silent Squeeze on Growth

Not long ago, customer acquisition felt like a golden goose. Throw some budget into search ads, spin up a clever Instagram campaign, maybe sprinkle in an influencer or two, and the orders rolled in.

Today? That goose has turned into a very expensive pet. The average CAC has doubled in the past five years, with paid social and search auctions driving costs higher every quarter. For many brands, acquisition now eats the very margin that’s supposed to fuel growth.

It’s the same story everywhere:

• Your ads cost more but convert less.
  
  
• Your margins shrink while platforms pocket the profits.
  
  
• Your competitors (especially those with deeper pockets) bid you out of relevance.

At some point, you realize the obvious: you’re not scaling a business, you’re scaling a tax bill.

Why CAC Hurts More Than the IRS

Here’s what makes acquisition cost especially insidious: it doesn’t compound.

• Invest in R&D and you create innovations that keep paying dividends.
  
  
• Invest in brand equity and you build loyalty that lasts.
  
  
• Invest in people and culture, and you reap the rewards for years.

But every dollar you feed into acquisition ads? The second you stop paying, the meter goes dark. It’s not an investment, it’s a treadmill. And the faster you run, the more exhausted (and less profitable) you get.

Some leaders will shrug and say, “That’s just the cost of doing business.” But the danger is in confusing spend with growth. If you’re buying every customer, you’re not building a brand… you’re renting one.

The Illusion of “Cheap Growth”

CAC is seductive because it looks like instant growth. Leadership loves charts that slope upward. Investors love top-line revenue gains. And marketing loves campaign dashboards with thousands of “new customers acquired.”

But here’s the catch: when the tax man (in this case, Google and Meta) raises the rate (and they always do), you discover that growth was never real. It was subsidized.

Worse, this treadmill mentality can lead to bad decisions upstream:

• Overproduction based on inflated forecasts.
  
  
• Overstocking because consumer demand wasn’t real, it was bought.
  
  
• Retailer frustration when they’re left holding the bag on unsold goods.

The Escape Route: Growth That Compounds

So what’s the alternative? Smarter brands are realizing that sustainable growth comes from compounding levers, not constant payments to the duopoly.

• Sell-through, not just sell-in: Stop celebrating shipments and start measuring what actually gets into consumers’ hands.
  
  
• Retailer relationships: Treat your retailers like partners, not just distributors. When they feel supported, they take bigger stocking positions and actively sell for you.
  
  
• Shop-floor advocacy: The most overlooked influencers aren’t on TikTok, they’re standing behind the counter at specialty shops. Train and incentivize them, and you’ll see a measurable spike in sell-through.
  
  
• Demand insights: Real data on consumer behavior feeds smarter forecasting, better manufacturing runs, and product launches that land, not flop.

These aren’t one-off “ad buys.” They’re investments that compound. Every season gets smarter. Every retail relationship gets stronger. Every product cycle gets sharper.

CAC vs. Compounding: The Future of Growth

Acquisition cost will never go away completely; like taxes, it’s here to stay. But the brands that thrive are the ones who treat CAC as a starting point, not the entire growth strategy.

Paying to bring someone in the door once is fine. Paying to bring them back again and again? That’s unsustainable.

The best growth is the kind you don’t have to keep rebuying:

• A customer who finds you in-store and returns online.
  
  
• A retailer who deepens their buy because sell-through data gave them confidence.
  
  
• A sales rep who uses insights to secure smarter orders instead of pushing boxes.
  
  
• A product cycle that’s forecasted from actual demand, not last year’s wishful thinking.

That’s not just lower acquisition cost: it’s structural growth.

A Tax You Don’t Have to Keep Paying

The lesson is simple: customer acquisition cost is a tax, but it doesn’t have to be a death sentence. Brands that keep throwing money into the auction firepit will eventually flame out.

The brands that win will be the ones who build ecosystems (of retail collaboration, data-driven decisions, and shop-floor advocacy) that generate growth on their own.

Because let’s face it: the best customer isn’t the one you just bought.

It’s the one who buys again, brings a friend, and sticks around long after the ad spend is gone.

At Quivers, we believe growth should come from smarter wholesale, stronger retail partnerships, and data-driven sell-through; not endlessly writing checks to ad platforms.

Acquisition cost may be the new tax, but with the right strategy, you can finally start filing for a refund.