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Hey guys! This week we're diving into one of the most counterintuitive lessons in B2C: don't try to acquire cheap customers even if it makes your CAC look good.

Founders often find it easy to compete on price and scale through aggressive promos in consumer markets, but this approach can dilute your value proposition and deflate your LTV as you end up acquiring the wrong customers.

After chatting with Travis from TourRadar, we discovered there's a different approach to customer acquisition that many B2C founders dismiss too quickly when they're in price-competitive markets - and it might actually solve the unit economics nightmares that keep so many consumer startups awake at night.

TourRadar is a platform for booking organized adventures - think multi-day tours, safaris, and treks across the globe with average order values of $3,000-$5,000. With over 50,000 adventures available and 5 million email subscribers, they've become the go-to marketplace for high-consideration travel experiences (you can read our last feature on TourRadar here) 

Travis's experience challenges everything we think we know about acquiring customers. Instead of racing to the bottom on price, TourRadar eliminated discounts completely and watched their profitability soar.

Their counterintuitive discovery: sometimes the fastest way to build a sustainable business is to stop trying to acquire cheap customers.

Discounts everywhere!

Promo-driven customer acquisition has become synonymous with B2C success.

The narrative is compelling: aggressive discounts provide faster conversion, lower CAC, and the volume needed to achieve rapid growth. For many consumer businesses with low marginal costs and viral mechanics, this approach can (and has) created unicorns.

But what happens when your business doesn't fit the promo-driven mold?

What if you're building premium experiences that take trust to sell, or developing products where price-sensitive customers actually hurt your unit economics?

Why TourRadar got hooked on discounts

During their hypergrowth phase in 2018-2019, TourRadar fell into the classic promo-driven trap. The logic seemed bulletproof:

• Competitive pressure: Every travel company was offering 10-15% discounts

• High price point: $3,000-$5,000 adventures felt like they needed sweetening to convert

• Immediate results: Discounts drove booking spikes and made their CAC look healthy

• Investor pressure: "Grow at all costs" mentality demanded aggressive customer acquisition

This approach initially worked. TourRadar's booking volume grew rapidly, and their customer acquisition costs looked impressive on paper. But they were building on a foundation of sand.

The hidden problems emerged quickly:

• Customer expectations changed: Customers began waiting for sales rather than buying at full price 

• Wrong customer segment: Price-sensitive customers had lower lifetime value and higher churn

• Masked product issues: Discounts became a crutch instead of improving their core value proposition

• Unsustainable unit economics: True profitability was hidden by promotional subsidies

Travis learned this problem the hard way:

This journey with TourRadar illustrates the power of value-driven acquisition for high-consideration consumer purchases. After years of being "addicted to the promo code," TourRadar made a radical decision: they eliminated discounts entirely.

This freedom proved crucial for TourRadar, which sells $3,000-$5,000 adventure travel packages. When investors started questioning their unit economics during their hypergrowth phase, they had the courage to test the opposite of what everyone else was doing.

Beyond the immediate financial benefits, value-driven acquisition offers zero dependency on promotional spending. While promo-driven models typically require 15-25% of revenue spent on discounts and deals, value-driven approaches require no price subsidization. 

For TourRadar, this meant they could invest promotional budgets directly into improving customer experience and trust-building.

So value-driven acquisition works for everyone?

No, value-driven acquisition isn't a silver bullet. There’s never one right answer for a startup. 

It works best for businesses with high-consideration purchases that have strong differentiation, premium experiences which require trust, and businesses addressing aspirational customer needs are often good fits for value-driven approaches (sounds exactly like a business selling Travel/Adventure packages right?) 

Travis doesn't suggest avoiding promotional strategies entirely. 

Instead, he demonstrates how testing value-first messaging can provide the insights needed to build sustainable unit economics from a position of strength. 

TourRadar used their discount elimination period to improve their value communication and customer experience before selectively reintroducing targeted promotions. They were no longer a place to find cheap holidays, but they became a destination for people who wanted a different type of vacation. 

The key is understanding what your customers want, how much they’re willing to pay for it and how it impacts your unit economics. 

For Travis, this strategic shift helped them significantly extend runway and prove that customers would pay full price, enabling better investor conversations and more sustainable growth.

What this means for you

If we had to boil this down into a few simple takeaways:

Stop optimizing for vanity metrics - Low CAC means nothing if those customers churn quickly or never buy again at full price.

Test eliminating discounts entirely - Even for just 30 days for a target customer segment. You might discover your customers value your product more than you think.

Measure customer quality, not just quantity - Track repeat purchase rates and lifetime value by acquisition channel. Promo customers often perform worse on both.

The brutal truth: if you can't sell your product without discounts, you might not have product-market fit yet.

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See you next week!

Rahul & Aryaman