The slide was clean. The trend line was bending in the right direction. The headline number was going down, quarter after quarter, by a meaningful margin each time. The number was, in the language of the dashboard, “trending in the right direction.”

I was reporting this slide to the regional leadership every quarter, and the slide was, by every conventional definition, true. The total marketing spend was real. The number of customers acquired was real. The arithmetic was real. The trend was real. The leadership was pleased. The board was pleased.

The slide was also, in the precise language of the work the marketing function was supposed to be doing, a beautifully precise measurement of the wrong thing.

This is the confession I have been wanting to make for several years, and the confession I think every marketing leader in Southeast Asia needs to make, because the number we are all reporting is the number that is hiding the work that actually matters.

What CAC Was Hiding

Here is what was happening behind the new, lower number.

By the end of that year, we had optimized the funnel to a fare-thee-well. The paid campaigns were producing leads at a cost the regional leadership had never seen. The lead-to-application conversion was up. The application-to-enrollment conversion was up. The enrollment-to-completion conversion was, on the dashboard, stable. The cost per enrolled student was, by the metric we were reporting, the lowest in the company’s regional footprint.

The cohort that had been acquired at the new, lower CAC was, by every available measure, a successful cohort. They had enrolled. They had started. They had, in the language of the dashboard, converted.

The cohort had also, by the end of the first month, produced a refund rate meaningfully higher than the cohort acquired at the previous CAC. They had also, by the end of the third month, produced a completion rate meaningfully lower. They had also, by the end of the program, produced a placement rate — graduates receiving a job offer within six months of completion — that was less than half the rate of the previous cohort.

When we ran the actual math — the cost per graduate who got hired, not the cost per enrolled student — the new low-CAC cohort was, in the precise language of the work the marketing function was supposed to be doing, several times more expensive than the previous cohort.

We had optimized the wrong number. We had done it brilliantly. We had reported the result to the board. The board had been pleased. The graduates had, in many cases, not been hired. The marketing function had, in the precise language of the situation, succeeded at the wrong thing.

The Number Every CMO Quotes Is the Number That Lies the Most

I want to make a broader claim here, because I think this is not a problem unique to any one company or market. I think this is a structural problem with the way marketing functions in Southeast Asia report success.

CAC is the most quoted number in our discipline. It is also, in most organizations, the most misleading. Here is why.

CAC is, by construction, a measure of the cost of producing a transaction, not a result. A transaction is a registration, a purchase, a contract signature. A result is a graduate who gets hired, a customer who retains for two years, a patient whose health outcome improves, a child who actually learns the material. The transaction is what the marketing dashboard reports. The result is what the organization exists to produce.

The optimization of CAC incentivizes the acquisition of customers who can be acquired cheaply, not the acquisition of customers who produce the result. A cheaper CAC is, in the language of the dashboard, always better. A cheaper CAC can be produced by targeting lower-intent audiences, by simplifying the offer, by reducing the qualification work, by selling to people who are easier to close. Every one of these optimizations can, in the short term, reduce the CAC. Every one of them can, in the medium term, degrade the result.

The lag between CAC optimization and result degradation is, in most organizations, longer than the dashboard reporting cycle. The result, in higher education, takes three to four years to manifest. The dashboard reports quarterly. The dashboard, in the precise language of organizational behavior, is the only reality the leadership sees. The result, when it eventually manifests, is attributed to “the program,” not to the marketing function, and the marketing function continues to be rewarded for the CAC it has been reporting.

This is the structural problem. The number every CMO quotes is the number that is structurally aligned with the dashboard, structurally misaligned with the result, and structurally resistant to correction.

What I Stopped Counting

After the new cohort produced its placement data, I rebuilt the marketing function’s reporting from the ground up. The dashboard did not go away — the regional leadership still wanted the CAC number, and the CAC number was still a useful operational metric. But the dashboard was no longer the headliner. The headliner became, in the language of the rebuilt report, the cost per graduate who got hired within six months.

The number was uglier. The number was, in some quarters, three times the CAC we had been reporting. The number was also, for the first time, a number that was aligned with the work the organization was actually doing.

When we rebuilt the model around the result, three things became visible that the CAC had been hiding.

The first thing was lead quality. The leads we had been acquiring at the lowest cost were, in many cases, the leads least likely to complete the program and get hired. The optimization of CAC had been, in effect, an optimization toward the wrong segment. When we re-targeted, the CAC went up. The cost per graduate who got hired went down.

The second thing was the nurture motion. The leads we had been discarding at the top of the funnel — the workshop attendees, the WhatsApp group members, the parents who had not yet decided — were, in the rebuilt model, the highest-quality source of graduates who got hired. The nurture motion, which the CAC model had been quietly penalizing, became the most valuable motion in the marketing function. The community we had built — the 3,500-member #UpgradeKarir cohort — was, in the precise language of the result metric, worth more than the entire paid acquisition budget.

The third thing was the offer. The program we had been selling — the fast-track, the high-intensity, the “get hired in six months” promise — was, in the rebuilt data, producing lower placement rates than the slower, deeper, more supported version of the program. The offer had been shaped, over the previous two years, by the optimization of the funnel. The offer had become, in the precise language of the result, a worse product. We rebuilt it. The placement rate went up. The CAC went up. The cost per graduate who got hired went down.

The Leadership Lesson, Again

The hardest part of this shift, as it had been with the conversation-based model, was not the marketing. It was the leadership.

The CAC number is the number the board wants to see. The CAC number is the number the regional leadership is evaluated on. The CAC number is the number the entire incentive structure of the marketing function is built around. Telling the board that the marketing function had been succeeding at the wrong thing was, in the precise language of the situation, a confession. The confession was true. The confession was also, in the short term, professionally expensive.

What I learned, slowly and with the help of a CEO who was willing to look at the data with clear eyes, is that the confession is the work. The work of a marketing leader is not to optimize the dashboard. The work of a marketing leader is to defend a model of value that the dashboard is not equipped to capture. The work of a marketing leader is to say, in language a CFO can hear, that the cost of a graduate who gets hired is not the same as the cost of a student who enrolls — even if the second number is lower, even if the second number is the one the board has been rewarding, even if the second number is the one that has been, until this conversation, the only reality the leadership has seen.

The leaders who understand this are the ones who build marketing functions that produce results. The leaders who do not understand this are the ones who leave behind a trail of declining CACs and rising refund rates, and a marketing function that looks productive in the dashboard and exhausted in the hallway, and a graduate cohort that has, in the precise language of the actual outcome, not been served.

The Number I Now Count

The number I now count, when I sit down with a marketing team, is not the CAC. The number I now count is the cost per outcome the organization exists to produce.

For a university, the outcome is a graduate who is, five years later, in a job that uses the credential. For a bootcamp, the outcome is a graduate who is, six months later, in a job in the field. For a B2B SaaS company, the outcome is a customer who, two years later, is still using the product and can articulate the value. For a healthcare provider, the outcome is a patient who, twelve months later, is measurably better.

Every additional layer of “outcome” is a layer of truth that the CAC is hiding. Every additional layer is a layer that the dashboard is not capturing. Every additional layer is a layer that the marketing leader has to defend, in language the leadership can hear, with data the organization can verify.

The CAC will not go away. The CAC is a useful operational metric. The CAC tells you whether your funnel is working. The CAC is the number the board will continue to want to see, because the CAC is the number that fits on a slide.

The CAC is also, in the precise language of the situation, the number that lies the most.

I stopped counting CAC as the headliner when I realized that the marketing function I was building was succeeding brilliantly at the wrong thing. The function I have built since then is messier, harder to report, and an order of magnitude more effective. The graduates it produces are more likely to get hired. The customers it produces are more likely to retain. The organizations it serves are more likely, in the precise language of the outcome that matters, to be successful.

The CAC is still in the corner of the dashboard. It is no longer the headliner. The headliner is the number that, when you finally measure it honestly, is the only one that matters.

I stopped counting the wrong number when I started counting the people behind it.