Solving Customer Acquisition Costs (CAC) Challenges: From Paid Media Over-Reliance to Multi-Channel Success

Are you struggling with rising customer acquisition costs (CAC), often relying heavily on paid media to drive growth?

While paid advertising can be an effective tool, an over-reliance on it creates vulnerabilities—higher costs, diminishing returns, and dependence on unpredictable platform changes. To build a more sustainable and profitable model, brands must diversify their acquisition strategies.

We spoke with Power Digital’s fashion marketing experts—Lilly Fuhrman, Senior Account Director; Hanna Lane, Group Director; and Madison Sternberg, Account Director—who shared their insights on the pitfalls of paid media dependence and how brands can successfully transition to a multi-channel strategy.

The Risks of Over-Reliance on Paid Media

Paid media can be a powerful driver of customer acquisition, but when brands rely on it too heavily, they put themselves at risk. “It makes you at the mercy of the platforms,” Sternberg explains. “During competitive periods, you’re even more impacted by rising CPMs – which will automatically hurt deliverability and ultimately sales. Or if you’re relying heavily on a platform like TikTok, which may suddenly be banned, you’re left scrambling.”

Beyond cost volatility, Lane highlights a common misconception among brands. “A lot of brands assume that if overall e-commerce is growing, they should be growing too,” she says. “But is that industry growth coming from brands like yours? Or is it being driven by fast-fashion giants like Shein and Temu?”

Additionally, Lane warns that focusing too much on paid media can create an internal issue. “It leads to a damaging mindset where brands think paid is responsible for everything. This can cause over-scrutinization of paid efforts instead of looking at the bigger picture.”

Diversifying Acquisition: A Strategic Approach

Breaking free from paid media dependence requires brands to diversify their customer acquisition strategies. But how can they make the transition successfully?

“A phased approach is key,” Fuhrman advises. “Rather than cutting off paid media, brands should gradually invest more in owned and earned channels while refining their audience strategy.”

Lane adds that even if Power Digital isn’t managing a brand’s organic channels directly, the team consistently consults on cross-channel strategies. “We’ll notice if lifecycle marketing is down and suggest retention-focused adjustments, even if that’s not in our scope. The key is ensuring that brands don’t rely on paid alone to sustain growth.”

What to Focus on Instead: Experts Reveal 3 Key Priorities

If brands are looking to reduce CAC while maintaining growth, they need to invest in alternative acquisition channels. Here are three areas to prioritize:

1. Organic & Lifecycle Marketing
   “Even if we’re not managing organic, we always look at how it supports paid efforts,” Lane says. “For example, if a brand has strong organic rankings for certain keywords, we might advise pulling back ad spend on those terms and reallocating the budget elsewhere.”

She continues, “The best brands successfully leverage their lifecycle marketing efforts—using email, SMS, and retargeting—to increase customer retention without depending solely on paid acquisition.”

2. Brand Awareness & Content Strategy
   Sternberg emphasizes that brands need to rethink their media mix. “SEO, influencer marketing, and even out-of-home advertising can provide additional touchpoints. Customers don’t just exist on Meta and Google—they’re engaging with content in different ways and need multiple touchpoints.”
3. Customer Segmentation & Personalization
   Lane highlights the importance of understanding customer behavior. “Brands that effectively segment their audiences can target different groups with tailored messaging based on first party data about their actual buyers. New customers might need more education about the brand, while existing customers may respond to exclusive offers or loyalty-driven messaging.”

The Long-Term Benefits of a Multi-Channel Strategy

Transitioning from paid media reliance to a multi-channel approach offers long-term stability and improved profitability. “Brands that successfully make this shift see a healthier balance between acquisition and retention,” Lane explains. “They’re not as vulnerable to fluctuating ad costs and can allocate resources more strategically.”

By integrating organic, lifecycle, and diversified marketing channels, fashion brands can drive sustainable growth while reducing CAC. While paid media will always have a place in customer acquisition, a well-rounded strategy ensures brands aren’t overly dependent on any single channel.

If your brand is looking to optimize CAC and build a more sustainable acquisition strategy, Power Digital can help. Contact us today to learn how we can tailor a multi-channel approach that drives long-term success.