On Lead Companies, CAC, and Sustainable Growth
The Only Two Things in Business That Matter
On Lead Companies, CAC, and Sustainable Growth
Most business conversations get lost in tactics.
Tools. Platforms. Hacks. Vendors. Trends.
But when you strip everything down, business comes back to two fundamental systems—and nothing else matters without them.
This short lesson explains those two systems, why most businesses only build one of them, and why over-reliance on lead companies quietly caps growth.
The Two Systems Every Business Needs
There are only two things that truly matter in business:
- A system that reliably and sustainably finds new customers
- A system that reliably and sustainably delivers the product or service
Everything else is commentary.
Most business owners already understand the second system. They know what they sell and how to deliver it:
- Painters know how to estimate, prep, and paint
- Remodelers know how to scope, schedule, and build
- Service professionals know their craft
Delivery is familiar. It’s tangible. It feels like “real work.”
Customer acquisition is where things fall apart.
Why Most Businesses Outsource Half Their Business
When it comes to finding customers, many businesses outsource the entire function to lead providers like HomeAdvisor, Angi, or similar networks.
There’s nothing inherently wrong with lead companies. Some businesses get decent results.
But there’s a structural problem most owners don’t see:
If you don’t control how customers enter your business, you don’t control your business.
A mentor once put it bluntly:
“If you can’t pay to acquire a customer profitably, you don’t have a business—you have a very expensive, time-consuming hobby.”
The Hidden Flaw in the Lead Company Model
Lead companies sell activity, not outcomes.
They charge per lead, click, or inquiry—regardless of whether that turns into a client.
It’s like a dating service charging you every time someone texts you back, instead of charging for an actual date.
In business, you don’t want leads.
You want clients.
Which brings us to the most misunderstood metric in marketing.
The Metric That Actually Matters: Client Acquisition Cost
Most people obsess over cost per lead (CPL).
That’s a mistake.
The only number that matters is cost per client—also known as customer acquisition cost (CAC).
Two scenarios:
- You pay $50 per lead, close 1 out of 10
- You pay $250 per lead, close 5 out of 10
The second option is dramatically more profitable, even though the leads are “more expensive.”
Cheap leads don’t build businesses.
Predictable client acquisition does.
Why You Want to Afford the Most Expensive Clients
Here’s the real goal:
You don’t want the cheapest leads.
You want to be able to afford the most expensive clients.
If you know:
- A client is worth $2,000 in profit
- It costs you $500 to acquire them
Then every dollar you put into acquisition reliably returns two.
At that point, scaling becomes arithmetic—not guesswork.
The Simple Marketing Machine Most Businesses Never Build
A sustainable acquisition system looks like this:
Ad → Impressions → Clicks → Opt-ins → Appointments → Clients
Each step has a number.
Each number can be measured.
Each conversion rate can be improved.
For example:
- 1,000 impressions
- 100 clicks
- 20 opt-ins
- 5 appointments
- 1 client
Once you run this loop enough times, patterns emerge.
You stop asking:
“How much does a lead cost?”
And start asking:
“How much does it cost to reliably create a client?”
Platform Matters, But Systems Matter More
Different businesses perform better on different platforms:
- Visual trades often work well on Facebook or Instagram
- Intent-driven services often perform better on Google Ads
But platforms are interchangeable.
Systems are not.
Without a measurable acquisition system, scaling is impossible—no matter how good your service is.
When a Business Can Finally Scale
Once both systems exist:
- Reliable customer acquisition
- Reliable delivery
Growth becomes mechanical.
If:
- One client costs $500 to acquire
- One client generates $1,000 in profit
Then:
- 3 clients = $1,500 in ad spend → $3,000 return
- 6 clients = $3,000 in ad spend → $6,000 return
Eventually, delivery becomes the bottleneck—and that’s when hiring, reveals, and real scale begin.
Final Takeaway
There are only two things that matter in business:
- A system that reliably and sustainably gets new clients
- A system that reliably and sustainably delivers value
If either one is missing, growth is accidental.
If both are present, growth is inevitable.
FAQs
What are lead companies?
Lead companies sell access to potential customers, usually charging per inquiry or contact rather than per closed client.
Why is cost per lead misleading?
Because it ignores conversion rates and profitability. Cheap leads that don’t convert are expensive in reality.
What metric should businesses track instead?
Customer acquisition cost (CAC)—the total cost to acquire a paying client.
Is it bad to use lead companies?
Not necessarily, but relying on them exclusively means outsourcing a core part of your business.
What’s the first step to building an acquisition system?
Mapping your funnel from impressions to clients and assigning real numbers to each stage.
If you want to build your own acquisition system instead of renting leads, I help companies design and implement marketing machines they actually control.
Email: [email protected]
If this post resonated, it’s part of a broader body of work on execution-focused business systems here:
👉 https://gabebautista.com/essays/execution/
