Supplement Industry Benchmarks: In the supplement industry, common marketing benchmarks like CAC and ROAS are often misleading because they are based on flawed, correlation-based attribution. The only benchmark that truly matters for sustainable growth is incremental lift, a metric most brands are not equipped to measure.
Read the full article below for detailed insights and actionable strategies.
The Supplement Industry's Misleading Metrics
As a direct-to-consumer (DTC) supplement brand, you are under constant pressure to perform. You are likely tracking a variety of marketing benchmarks, such as Customer Acquisition Cost (CAC) and Return on Ad Spend (ROAS), to gauge your success. The problem is, these metrics, as they are commonly calculated, are fundamentally flawed. They are based on outdated, correlation-based marketing attribution models that don't tell the whole story.
Deconstructing Common Supplement Benchmarks
Let's take a closer look at the most common benchmarks in the supplement industry and why they are so problematic:
Customer Acquisition Cost (CAC): The average CAC for a supplement brand is often cited as being between $70 and $120. While this can be a useful starting point, it's a dangerous number to fixate on. A low CAC is not necessarily a good thing if you are acquiring low-value customers who churn after their first purchase. The focus should be on acquiring customers with a high lifetime value (LTV), even if it means a higher initial CAC.
Return on Ad Spend (ROAS): A high ROAS is the holy grail for many marketers, but it can be a vanity metric. If you are generating a high ROAS from branded search campaigns, you are likely just harvesting demand that you created through other channels. The true, incremental ROAS of that campaign is likely much lower.
Conversion Rate: A high conversion rate is always a goal, but it's important to understand who you are converting. Are you converting new customers who are discovering your brand for the first time, or are you simply converting existing customers who are coming back for a repeat purchase? Both are important, but they need to be measured and understood separately.
The Danger of Averages
Industry benchmarks are based on averages, and averages can be very misleading. The supplement industry is incredibly diverse, with products ranging from vitamins and minerals to highly specialized nootropics and sports nutrition products. The 'average' benchmark is irrelevant to your specific brand, your specific product, and your specific customer.
The Only Benchmark That Matters: Incremental Lift
Instead of chasing misleading industry benchmarks, you should be focused on the only benchmark that truly matters: incremental lift. Incremental lift is the measure of the sales that you are generating that you would not have generated without a specific marketing activity. It is the true measure of your marketing's effectiveness.
Incremental Sales = (Total Sales with Marketing Activity) - (Baseline Sales without Marketing Activity)
Measuring incremental lift requires a causal understanding of your marketing, which is something that traditional attribution models simply cannot provide.
Causality Engine: Your Custom Benchmark Solution
Causality Engine is a marketing intelligence platform that uses Bayesian causal inference to measure the true incremental lift of your marketing activities. We help you move beyond the generic, misleading benchmarks and build a custom set of benchmarks that are tailored to your brand and your goals.
| Feature | Traditional Benchmarking | Causality Engine |
|---|---|---|
| Focus | Industry averages | Your brand's specific performance |
| Methodology | Correlation-based | Bayesian Causal Inference |
| Key Metric | ROAS, CAC | Incremental Lift |
| Outcome | Misleading comparisons | Actionable insights for growth |
Our Intelligence-Adjusted Attribution model gives you a clear and accurate picture of your marketing performance. Our Causality Chain Visualization helps you understand the complex interactions between your channels. And our Refinement Queue provides a prioritized list of actions to improve your ROI.
Stop Guessing. Start Growing.
It's time to stop guessing and start growing. It's time to move beyond the misleading benchmarks that are holding your brand back and embrace a causal approach to marketing. It's time for Causality Engine.
Unlock your true growth potential.
For more information, visit our resources or check out our pricing.
Related Resources
Free Attribution Model Comparison Worksheet (Download)
Offline to Online Attribution: Bridging the Data Gap
Causality Engine vs. Cometly: Attribution Software Compared
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Key Terms in This Article
Attribution Model
An Attribution Model defines how credit for conversions is assigned to marketing touchpoints. It dictates how marketing channels receive credit for sales.
Attribution Software
Attribution Software measures campaign impact by tracking customer interactions across touchpoints. It assigns value to each channel, showing what drives conversions.
Customer acquisition
Customer acquisition attracts new customers to a business. For e-commerce, this means driving the right traffic to the website.
Customer Acquisition Cost (CAC)
Customer Acquisition Cost (CAC) is the cost to convince a consumer to buy a product or service. It measures marketing campaign effectiveness.
Lifetime Value (LTV)
Lifetime Value (LTV): The total revenue a business expects from a single customer account over their lifetime.
Marketing Attribution
Marketing attribution assigns credit to marketing touchpoints that contribute to a conversion or sale. Causal inference enhances attribution models by identifying true cause-effect relationships.
Online Attribution
Online Attribution connects sales and conversions to specific digital marketing touchpoints. It identifies which online channels contribute most to marketing goals.
Return on Ad Spend (ROAS)
Return on Ad Spend (ROAS) measures the revenue earned for every dollar spent on advertising. It indicates the profitability of advertising campaigns.
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Frequently Asked Questions
How can Causality Engine help me with my product launch strategy?
By understanding the causal impact of your marketing, you can make more informed decisions about how to launch new products. We can help you identify which channels are most effective for driving awareness and trial, and how to allocate your budget for maximum impact.
We have a strong community around our brand. How can you measure the impact of that?
Our causal models can incorporate a wide variety of data sources, including community engagement metrics. We can help you understand the causal impact of your community-building efforts on your bottom line, so you can invest in the activities that are truly driving growth.
What kind of data do I need to get started with Causality Engine?
We can work with the data you already have in your Shopify store and ad accounts. Our platform is designed to be easy to set up and use, and our team of experts is here to help you every step of the way. You can get started with a one-time analysis for just $99.
