Characteristics of Dominant Businesses and Declining CACs

Businesses that achieve significant market share, even in a small market, exhibit declining customer acquisition costs (CACs). A key identifying feature of successful businesses is the presence of declining CACs. Dominant businesses benefit from reduced sales and marketing costs as they become the preferred choice for customers. In competitive environments, businesses struggle to lower CACs due to the constant need to acquire new customers. Companies with dominant market positions enjoy the advantage of being the first choice for customers, leading to lower CACs and increased market share.