One of the (few) calculations for my Business and Entrepreneurship class is customer acquisition cost. I’m a fan.
Rewriting the text for the upcoming year forced me to reemphasize and reiterate the value of a low CAC. Especially in the world of social media marketing and influencer marketing where CAC is sometimes zero. It’s an incredibly powerful idea.
But anything zero or low coast can be. Especially when part of an equation that divides (zero by many) or one that multiples many by a low cost (such as almost zero).
Talking with Chicago Fed Chair, Tyler Cowen asked about this very thing.
COWEN: What would be an example of something with a marginal cost of zero?
GOOLSBEE: [laughs] Well, I don’t want to reveal anything about our operations and get myself in trouble about the Federal Reserve operations. If you look at marginal cost of zero things, opening meetings to include others and having folks work together, sharing of information can often have very low cost — if not literally zero — and strong benefits.
Maybe this is the engine of alchemy. Find something that costs nothing (or very very very little) and do more of that. If it’s valuable (or very very very valuable) do a lot more of that.
Related: Free Things.
The Waiter's Pad 