💎Increasing The Gap

Seriously, if you’re an early-stage startup (especially in D2C), there’s one piece of advice that can truly make or break your success: focus on widening the gap between your cost to acquire customers and how much those customers are worth to you at the bottom line.

Think deeply about it before you get started.

Run The Numbers On Your Distribution...

One of the keys to success for your new startup is having an idea how you’ll untie acquisition costs from the lifetime profit you can expect from each new customer.

This is the gap you need to widen, to truly be able to scale efficiently.

Without running out of cash before you figure it out.

It sounds simple but it’s the one biggest reason I’ve seen new startups struggle.

And it’s because 90% of first-time founders think haven’t ran the numbers before they start the business.

They assume their pretty product will be enough.

Why wouldn’t people buy it, right?

“I’ll just build a website and start selling.”

They don’t realise that distribution will be their biggest hurdle.

And they simply don’t know their unit economics deeply enough to know what options what options are even available to them based on their margins.

The fact is, a lot of ecommerce brands aren’t aware that without a huge amount of virality or cash-on-hand they’ve started a business that will be almost impossible to scale.

So spending some time thinking about what this looks like for you is one of the most important shifts you can make.

Focus on this from the start, and you’ll be ahead of 90% of startups and be in a much stronger position to:

• Improve your cash flow: Less stress about constantly bringing in new customers just to stay afloat.

• Give yourself room to breathe: You’ll have more capacity to handle the inevitable hiccups, mistakes, and delays that come with the startup grind.

• Set yourself up for scalable growth: Instead of feeling stuck, you’ll be creating a clear, sustainable path forward.

• Make your life a whole lot easier: Running a business isn’t supposed to be all chaos - this helps bring some order to the madness.

So, how do you actually do this?

There is a lot that can contribute, but the key is to focus on three important areas:

1. Retention: It’s way cheaper to keep a customer than to constantly replace them. By building stronger, longer-lasting relationships, you can create a snowball effect. When you’re not just replacing customers but growing your base over time, you’ll see your revenue compound.

2. Maximise Customer Value: Are you getting the most out of each customer? This isn’t about charging more - it’s about finding ways to deliver more value to them. Whether it’s upselling, cross-selling, or simply improving your product, when customers feel like they’re getting a lot for their money, they’ll keep coming back (and spend more).

3. Look for awareness beyond paid ads: I know it’s tempting to pour all your budget into ads, but they shouldn’t be your only strategy. Explore other ways to get the word out, like organic social growth, partnerships, or referral programs. When you can grow your audience without relying solely on paid ads, you’ve got more freedom to scale in a sustainable way.

Simple to understand, harder to execute.

Let’s be real - this is easy to grasp in theory, but much harder to execute consistently.

But if you keep it at the forefront of your mind as you build, you’ll be rowing in the right direction for the growth to get easier.

And once you start thinking this way, your startup will have the foundation it needs to thrive.

Cheers,
Jack

P.S. Want to chat more? Happy to connect, just hit reply.

#startups #customeracquisition #startup #operationalexcellence #d2c #growth

P.S. There are 3 ways to get involved, whenever you’re ready:

#1: Apply to join the private growth network of skilled entrepreneurs and specialists building together to reach their biggest goals.

#2: Subscribe to our YouTube channels Drafted Success & Drafted Mind

#3: Follow @draftedsuccess & @drafted.mind on Instagram.
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Finally…this newsletter is sponsored by LemonTop Digital.

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Jack Wilson
Founder @ Drafted Media
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