#705: What happens to your KPIs when both CLV and Customer Acquisition Costs rise? With Jamie Domenici, Klaviyo

Summary

Podcast Summary: The Agile Brand with Greg Kihlström®

Episode #705: What Happens to Your KPIs When Both CLV and Customer Acquisition Costs Rise? With Jamie Domenici, Klaviyo

Release Date: July 16, 2025

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In episode #705 of The Agile Brand with Greg Kihlström®, host Greg Kilstrom engages in a deep dive with Jamie Domenici, Chief Marketing Officer at Klaviyo, to explore the intricate relationship between Customer Lifetime Value (CLV) and Customer Acquisition Costs (CAC). As both these key performance indicators (KPIs) rise, the conversation centers on strategic approaches brands can adopt to sustain and enhance long-term business value.

1. The Rising Challenge: CLV vs. CAC

The episode kicks off with an introduction to a pressing issue highlighted in the Klaviyo B2C report: both CLV and CAC are on an upward trajectory, posing a significant challenge for brands aiming to build sustainable growth. Greg sets the stage by emphasizing the need for agility in marketing strategies to navigate these rising costs.

2. Shifting Focus to Long-Term Value

Jamie Domenici underscores the importance of prioritizing long-term customer relationships over short-term gains. He states:

"The reality is things are getting more expensive. ... the lifetime value. It is the obsessing over the customer over their entire lifetime. How you get to know them, how you keep them, how you retain them. This is really like the key to success."
[04:28]

Jamie advises brands to move beyond mere click metrics and invest in real-time personalization and relationship-building to enhance CLV. This approach ensures that acquisition efforts translate into lasting customer loyalty.

3. Overcoming the Complexity of Tracking CLV

While many marketers acknowledge the importance of CLV, tracking it accurately remains a challenge. Jamie offers practical solutions:

"You need to make it easier to do hard things... track every single touch point of the journey, and then allow you to really create that omnichannel experience."
[05:48]

He emphasizes the necessity of leveraging robust technology to unify customer interactions across various channels, thereby providing a comprehensive view of each customer's journey.

4. Tackling Martech Tool Sprawl

A significant portion of the discussion revolves around the proliferation of marketing tools. Greg cites statistics from the report indicating that 60% of teams manage between six to fifteen marketing tools, leading to inefficiencies.

Jamie shares insights from Klaviyo’s experience:

"More buttons does not equal sophistication... It adds up... they consolidated and they found that they were able to reduce their cost of acquisition by 10% across every channel just by consolidating it and having it in one place."
[07:28]

He illustrates how integrating tools within a unified platform like Klaviyo can streamline operations, reduce costs, and enhance marketing effectiveness.

5. The Power of Omnichannel Marketing

Jamie highlights the advantages of an integrated omnichannel approach through real-world examples:

"With Klaviyo, ... we make it really easy so that the top checker company can focus on, do I have the right offer?... We help them figure it out, how to personalize down to that last person, which really, really matters."
[09:13]

He discusses how brands like Tatcha leverage Klaviyo’s capabilities to manage large-scale promotions seamlessly across multiple channels, ensuring timely and personalized customer interactions.

6. Enhancing Internal Team Efficiency

The conversation shifts to internal team dynamics, where Jamie emphasizes the benefits of a streamlined Martech stack for lean marketing teams:

"Bringing the tools that matter, the tools that touch and creating the easiest place for your employees to do their best job is key."
[13:19]

He shares success stories, such as Laura Geller’s significant increase in SMS revenue after consolidating their marketing tools within Klaviyo’s platform, demonstrating the tangible impact of reduced tool complexity.

7. Building Comprehensive Customer Profiles

Addressing the challenge of unifying customer data, Jamie provides actionable steps:

"Don't want to boil the ocean... clean your list... build smart integrations... track your data."
[16:45]

He advises marketers to prioritize list management, automate data integrations, and implement robust tracking mechanisms to create meaningful and actionable customer profiles without overwhelming resources.

8. Balancing Acquisition and Retention Strategies

The discussion explores the tension between executive focus on long-term CLV and directors’ emphasis on short-term acquisitions. Jamie suggests:

"Build goals against both your cost of acquisition and your short-term revenue goals, but looking at the long-term value of the customer."
[18:44]

He advocates for unified metrics that bridge the gap between different organizational levels, fostering a holistic approach to customer management that balances acquisition and retention efforts.

9. Staying Agile as a Marketing Leader

Concluding the episode, Jamie shares his personal strategies for maintaining agility in his role:

"It's all about being customer first... staying connected to data... apply AI to everything I do right now just to make it easier so I can do more, be more productive."
[22:14]

His approach underscores the importance of customer-centricity, data-driven decision-making, and leveraging artificial intelligence to enhance productivity and adapt to evolving market demands.

Key Takeaways

• Long-Term Focus: Prioritize CLV over short-term metrics to foster sustainable growth.
• Integrated Martech: Consolidate marketing tools to reduce costs and improve efficiency.
• Omnichannel Strategy: Utilize unified platforms to manage customer interactions seamlessly across all channels.
• Comprehensive Data Management: Implement smart integrations and robust tracking to build complete customer profiles.
• Balanced Approach: Align organizational goals to balance acquisition and retention strategies effectively.
• Agility and AI: Embrace customer-first principles, data connectivity, and AI to stay agile in a dynamic marketing landscape.

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This episode provides invaluable insights for marketing leaders striving to navigate the complexities of rising CAC and CLV. Jamie Domenici’s expertise illuminates strategic pathways to enhance customer relationships, optimize Martech investments, and drive long-term business success.

Transcript

[Greg Kilstrom]

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[Jamie Domenici]

The Agile Brand.

[Greg Kilstrom]

Welcome to Season seven of the Agile Brand where we discuss the trends and topics marketing leaders need to know. Stay curious, stay agile and join the top enterprise brands and Martech platforms as we explore marketing technology, AI, e commerce and whatever's next for the Omnichannel customer experience. Together we'll discover what it takes to create an agile brand built for today and tomorrow and built for customers, employees and continued business growth. I'm your host Greg Kilstrom, advising Fortune 1000 brands on martech, AI and marketing operations. The Agile Brand podcast is brought to you by Tech Systems, an industry leader in full stack technology services, talent services and real world application. For more information, go to teksystems.com to make sure you always get the latest episodes, please hit subscribe on the app you listen to podcasts on and leave us a rating so others can find us as well. Now onto the show.

[Unknown]

Customer Lifetime value is a critical KPI. But with customer acquisition costs rapidly rising, what can brands do to successfully build long term value for the business? Agility requires seeing past vanity metrics to the durable value hidden in customer relationships. When customer acquisition costs climb and privacy affects easy targeting, only nimble brands, those that align teams, data and KPIs around lifetime value stay ahead. All of this and a few more things are discussed in the recently released Klaviyo B2C report. To discuss it, I'd like to welcome Jamie Domenici, CMO at Klaviyo. Jamie, welcome to the show.

[Jamie Domenici]

Hey thank you so much for having me.

[Unknown]

Yeah. Looking forward to talking about this with you. Definitely some interesting stuff in that report. Before we dive in though, why don't we start with you sharing a little bit about your background and your role at Klaviyo.

[Jamie Domenici]

Yeah, thanks. Well, Jamie Domenici. So you know my name. I'm a CMO here at Klaviyo. Before that I worked at Goto, and before that I was at Salesforce for a long time. Been in marketing my whole career. And I've actually lived in the Bay Area also for my whole career. So I'm here in San Francisco today and yeah, just excited about this topic.

[Greg Kilstrom]

Nice, nice.

[Unknown]

Great. And for those listening that are not as familiar with Klaviyo, can you share a little bit about what Klaviyo does?

[Jamie Domenici]

Absolutely. Well, everybody who should know what Klaviyo does. But for those of you who don't, let me tell you, Klaviyo is the only CRM that was built for B2C companies. So we help you connect to your customers, whether you're doing marketing or service across every single channel. So from SMS to email to push to website to notifications, wherever your customers are, we bring it all together and help you as marketers or service professionals, connect with them in the best ways.

[Unknown]

Yeah, love it. Love it. Well, yeah, let's. Let's dive in here then. So first thing I want to talk about is what I briefly touched on in the intro, and that's this idea of that the report touches on even more about rising customer acquisition costs versus customer lifetime value and how these things kind of intersect. So the report shows both customer acquisition as well as lifetime value, both trending upwards. What's the first thing a brand should rethink when those two are rising together?

[Jamie Domenici]

Yeah, be scared. No, just kidding. But yeah, the reality is things are getting more expensive. And we're hearing that across the board, like the cost of acquisition and lifetime value are keeping a customer finding customer. It's just getting more expensive. So I think the first thing that brands should think about is not just think about the short term. Right. A lot of people are just thinking about clicks, like how many people can I get in the door? What's that? Short term cost of acquisition cost. But the reality is it is the lifetime value. It is the obsessing over the customer over their entire lifetime. How you get to know them, how you keep them, how you retain them. This is really like the key to success. Like, you know, acquisition will get you in the door, but it's actually that real time personalization and long term relationship that keeps them to become an oncoming customer. So you gotta think about that from day one and not just optimize for the short term.

[Unknown]

Yeah, yeah. And you know, so I think a lot of marketers are talking about lifetime value and certainly I've written plenty about it and talked about it plenty myself. But they're significantly more likely to track engagement than clv. You know, for lots of reasons for that. Sometimes it can be complicated to accurately track customer lifetime value. But you know, what's your recommendation here and what should brands do to adjust their approaches?

[Jamie Domenici]

Well, one, you gotta like make it easier to do hard things. Right. You know, if you're just thinking about that first interaction, you're gonna be really limited. And frankly, like that's just bad marketing. I can say that I'm a cmo, I can say that. So, but how do you do it? Well, I think first of all, you need to think about every single interaction that you have with your customer. So I think about it as like, you need to create the list, you need to clean the list, you need to keep the list. You gotta know everything. So make sure that you're using technology that allows you to really understand who your customer is, track every single touch point of the journey, and then allow you to really create that omnichannel experience. So, so if you are able to track every interaction, whether it's on your website, email, text, you name it, and whether it's like yesterday or five years ago, you really want to know everything to understand your customer and their entire lifetime with you and then the ability to measure. So thinking about what tooling, what technology you're using to actually capture that, make sense of it and tell you if it's working are really critical steps to thinking about that lifetime value.

[Unknown]

I think that's a good segue because a lot of companies to track that omni channel journey, they're using a lot of tools. And so you know, from, from the report, what is it? 60% of teams are juggling anywhere between six and 15 marketing tools. I can, I can empathize with this, you know, in plain numbers. You know, what's the cost? Not just monetary cost, but you know, what's, what's the cost? Anywhere from license fees to lost insights to productivity of juggling over a dozen marketing tools.

[Jamie Domenici]

You know, it's kind of like a sneaky cost that sometimes you don't know about. And I will say CMOs, I love, I love marketers and I love that we're trying to keep it on the cutting edge of technology so we'll be quick to adopt new tools. But what happens is exactly what you said, Tech SP Crawl. You have to have someone to manage all the tech. And then what we were just talking about, knowing your customer is really, really hard. You have to manage five different systems and be like an incredible data analyst to understand what's going on. So it adds up. And like our customers, if I think about Happy Wax, they sell like fragrance wax melts, which are very cute. They look like bears, kind of look like a gummy bear. Don't eat them. But they're wax. So great. They're one of our customers and they came to us because they were in that situation. They had a ton of different tools, one for sms, one for reviews and one for email. So they, they couldn't manage it. They're a small business. Right. They didn't have an entire team of people to manage it and ended up, they came to us, they consolidated and they found that they were able to reduce their cost of acquisition by 10% across every channel just by consolidating it and having it in one place and then also drive growth because not just about costs, it's about how are you driving growth when you have better visibility. So they were able to grow their SMS channel 18% year over year just by having all of those customer interactions in one place?

[Unknown]

Yeah, yeah. Is scale an excuse to just kind of. I, I mean, I like playing with toys and, and stuff like that for sure. Like it's, it's nice to have the latest and greatest. But is this, is this tech sprawl, you know, can there be a reason for, you know, even the very large companies, like, can there be a reason? Is it, or is it just mistaking more buttons for sophistication?

[Jamie Domenici]

No, more buttons does not equal sophistication. You know, even for our hundred million dollar brands, down to our entrepreneurs. Like, we think that more buttons is, is actually creating a lot of inefficiency and a lot of confusion, not only for your marketers themselves, but for your customers. Right. Which at the end of the day you don't want to confuse your customers. So we feel like marketers shouldn't be chasing like that part should be easy, but marketers should be spending their time on how do I bring my brand alive, how do I build the best experience, how do I help, you know, bring the right words to the right in the right images for the right product? I don't want to simplify marketing. Marketing is Very complex. But the tool should do the work for you. And so I think that's where having everything into one place really matters. But also having everything work easier for you, especially when you're managing millions and millions of customer interactions. Like, technology's got to work hard. Tatcha, which is like one of our best customers, our skincare company, they do a lot of different things, but they also do this New Year's Eve drop, where they are sending all, you know, millions of customers this offer. They need to be able to measure that. And they didn't have the ability because they would send some of their promos over text, some over email. They were using different systems. It was just really hard to manage. So they came to us, and now they're using our omnichannel marketing capability. And you're like, oh, omnichannel marketing? What does that mean, Jamie? Well, I was like, the ability to have all of your data in one place and then orchestrate the right channel at the right time, but it's down to the exact customer based on their behavior. This is every marketer's dream. And now it's a reality. With Klaviyo, with our marketing automation, with our omnichannel marketing, we make it really easy so that the top checker company can focus on, do I have the right offer? Is my drop right? Do I have the right promo? Am I talking to the right people? And we help them figure it out, how to personalize down to that last person, which really, really matters.

[Unknown]

Yeah, because I mean, in reality, customers are not. They're not thinking about what channel they're trying to interact on. Any, you know, they're. They're on. They're on all the channels. They're just, I need this. I have this device or this thing in front of me. I'm going to use it to, to interact. Not, oh, I better interact on, you know, the website versus an app or whatever. Because.

[Jamie Domenici]

No, I mean, I always. I have two teenage daughters, very pray for me. Uh, my oldest one, she just graduated and she needed a. She wanted a pink sequin dress for her prom, which is like, okay, whatever. But it was just very specific. So of course she's like, mom, find it for me. And you have one week. So, you know, I'm a busy woman. I work, so I'm in the morning, I'm on SMS at night. You know, I might be scrolling the Internet, I might go onto the website, maybe I'll have an app and. But at different points of the day, I'll do different Things. I'm telling you, the company that knew me was Princess Polly, which they sell lots of prom dresses. If you have a daughter, you've definitely bought something there. Even if you haven't, maybe you want to do well, it doesn't matter. But they knew me, right? They do use Klaviyo. I knew that, but they knew me, so they knew using sometime optimization when I'm shopping where. So instead of sending me four different messages on four different channels on the times when I'm not available, they were able to optimize based on AI down to what I was searching for, exactly what I needed to surface up when I was free on the right channel. That dress, which I ended up buying. Thank you, Princess Polly. But like, that's the world we live in now, right? So when you think about lifetime value, you have to be the company that is literally knowing your customer for a lifetime to capitalize and grow your company. It's just the way of the world works now.

[Unknown]

Yeah, yeah. Well, and then, you know, the, the flip side of that too is having a more nimble tech stack, you know, not having 15 different tools that your teams are running around on, having a more agile, you know, just enough kind of martech stack. It also helps the internal teams as well. Can you talk a little bit? You know, what does that look like for the internal teams that are trying to manage all these channels and do all those things to, you know, enable that kind of experience that you described?

[Jamie Domenici]

Yeah, I mean, that's great. I, we at Klaviyo, we have over 150,000 customers. So I spend my days talking to marketers, which I love. Best job in the world. But I find something consistent in B2C marketing in particular. Marketing teams are lean. Right? You have one person who's managing all your tools and building the promos and doing a lot of the segmentation. And so you're running a lean team. You don't want that person trying to manage 3, 5, 11 different tools. It's just not where their skill set lies. And where most marketing marketers, most companies, they're. They're not. That's not where they want to put their dollars. Right? So it's not, it's about having not 30 tools, but having the right tools that work for you together. Laura Geller. They're one of our customers. They brought their email and sms, for example, onto Klaviyo's platform. And just having that all in one place change the way they engage with their customers. And it created like a 3.9x return in their SMS revenue. But like 3.9 is a lot, that's a lot of dollars just by bringing everything into one place. So it's bringing the tools that matter, the tools that touch and creating the easiest place for your employees to do their best job is key.

[Unknown]

Yeah. And I would imagine that in addition to the 3.9x, there's also efficiency, savings and there's, there's other kinds of. Yeah, like intangible stuff. Right. You know.

[Jamie Domenici]

Yeah. I mean you're saving time, optimization, productivity building, better personalization but at the end of, the end of the day, like you're also making more money. I think grew like over 129% from their SMS recipients just in their first year. So. And that matters, right? Every dollar counts.

[Unknown]

Right.

[Jamie Domenici]

So driving that revenue, finding those efficiencies. Efficiencies are really critical to the scaling modern marketer, I would say.

[Greg Kilstrom]

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[Unknown]

And so going back to that, that end, customer experience too. You know, another thing from the report. So one in five organizations can't build a complete customer profile. I've, I've, I think I've been, I've, I've, I'm, I've seen that organization a time or two. So you know, for a team that's stuck there, you know, what's the maybe smallest practical first step to unify data without, you know, some of these data transformation projects. Again, I've been part of those too. It's like they can take years and years and years and sometimes, you know, never be 100% done, but they don't have to be 100% done to be useful and meaningful. So you know, what's a, what's a practical step to start unifying data?

[Jamie Domenici]

That's a great question. You don't want to boil the ocean. As you said, data product I. One of my first job. This is a long time ago. Don't tell anyone But I was like, I had a team of master data management, data management team and it was actually like five interns who literally went line by line in my Excel spreadsheet to try and understand our list. Terrible job. I'm so sorry. Those incredible folks. It was a long time ago. Tools are a lot better.

[Unknown]

Yeah, I think, Jenny, I can do that now. But, but yeah, back in the day. Yeah, yeah, right.

[Jamie Domenici]

That was a long time ago. But I think it all comes down to list management. I think you have to be really smart about how you clean your list. And the second is about how you build your list. I mean the modern marketer, we're pulling from tons of different data sources from your website, from you know, emails, sms, push notifications. I think you have to be really smart from day one about how you build those integrations and be very thoughtful about it. You, I think when you get into that world of manual list loading, it takes you back to my master data management team. Like there's a lot of room for error. So anything that you can do to automate your integrate data integrations on day one. So pick a provider that allows you to bring all the data into one place that really matters. And I would say my third advice is like track your os, track your data. It's not enough just to unify it and then use it. You need to get really smart about how you're measuring the impact of when and how you're interacting with that customer profile so that it's meaningful. Because having data alone and not doing anything with it is also a problem that we see a lot.

[Unknown]

Right, Right. Well, yeah. And you know, to that end, so again, citing the research, it's showing that executives are, you know, kind of betting on the existing customers while the directors are chasing the net new eyeballs customers. You know, is there a right answer here? How do you find the balance between those. Those can't. I mean you need both. Right. So how do you find the right balance?

[Jamie Domenici]

Oh, get rid of the executives. No, just kidding.

[Unknown]

That's a solution.

[Jamie Domenici]

You know, one choice. But I think, I think that why found that in the report is most often executives have probably seen this before and they kind of have a deeper appreciation for the long term value of the customer. But then the directors who are on the ground sending the emails, feeling the pressure like they might more optimize more for the short term and really think about like if I send this email, I can drive this promo. I'll get a drop, I'll get a, like a pop. So I think that the best thing you can do is think about. This is going to be a common theme. But think about data and how you're measuring it to share outcomes together. Right. So building goals against both your, your cost of acquisition and your short term revenue goals. But looking at the long term value of the customer, I think about the leadership level and the director level. You're looking at both of those and using them to really drive that unified outcome. You can bridge that gap. But it's, it's usually the pressure of the day to day job that's impacting the different leaders differently.

[Unknown]

Yeah, yeah. And I mean at the end of the day, again, you. A company needs both. I mean they need, you know, as, as nice as it is to have really loyal customers. Like there is churn. No matter, like in the, in the best of cases, there's churn. Right.

[Jamie Domenici]

So.

[Unknown]

But yeah, I mean it's, you know, I thought it was really interesting that both, you know, the acquisition and lifetime value rising, you know, and just that dynamic and what that does. So, you know, interesting to see that and just to kind of keep that in mind because I think a lot of depending on the team that you sit on, you're either, you're, you're either solely acquisition or you're solely like retention sometimes. And.

[Jamie Domenici]

Yeah.

[Unknown]

So just to understand that the, there needs to be a better balance there probably with a lot of teams. Right.

[Jamie Domenici]

Yeah. And I find more and more teams are blending those roles and even putting it under the same leader, which I love. I think when you look at those two worlds really separate, you lose the entire journey. So I mean, of course you have acquisition cost and you're going to do different tactics, but I always expose both of those teams to the same metrics. So they're thinking more about. This is just step one. But I'm going to build an entire relationship. I think that changes the way you think about both pre sales and post sales just from a marketing tactics standpoint.

[Unknown]

Yeah.

[Jamie Domenici]

I put them in the same room and make them duke it out. No, just kidding.

[Unknown]

Well, because I mean at the end of the day it's. If we're actually talking about omnichannel and the whole journey, everybody needs, everybody has a perspective and maybe a focus, but everybody needs to kind of understand the whole. Right. In order to really do their job. Yeah.

[Jamie Domenici]

Right. And I think that the retention team, which I don't even like to call it retention team because I think you're all on the customer team. It's just how the customer enters the door and then how you get the customer to stay in the house. Right. So you're all on the same property. So I think the more that you can integrate and think about the first, the entire journey, the better you are at understanding the customer, driving more value for your company and you know, keeping that to be a lifetime customer who doesn't buy just once but keeps buying which we all want.

[Unknown]

Absolutely. Love it. Well, Jamie, thanks so much for your ideas and insights here. One last question for you. I like to ask everybody, what do you do to stay agile in your role and how do you find a way to do it consistently?

[Jamie Domenici]

Oh, that's a really good question. So, and we gotta be agile. I mean, geez, every day here between tariffs and different things that are happening in the world, I think you in AI, I mean between these two things. In my last month my, my world has been consumed. So for me I, it's all about being customer first. I really try and talk to a customer a day in my role and make sure that I'm staying connected to what matters most. And then from there I'm trying to think about how I scale so I stay really connected to the data that I have internally to understand my customers. And then I do try and apply AI to everything I do right now just to make it easier so I can do more, be more productive.

[Unknown]

Yeah. Love it. Well, again I'd like to thank Jamie Domenici, CMO at Klaviyo for joining the show. You can learn more about Jamie and Klaviyo by following the links in the show notes.

[Greg Kilstrom]

Thanks again for listening to the Agile brand brought to you by Tech Systems. If you enjoyed the show, please take a minute to subscribe and leave us a rating so that others can find.

[Unknown]

The show as well.

[Greg Kilstrom]

You can access more episodes of the [e-mail] that's theagile brand.com and contact me. If you're interested in consulting or advisory services or are looking for a speaker for your next event, go to www.agile.

[Unknown]

Greg kilstrom.com that's G R E G.

[Greg Kilstrom]

K I H L S t r o m.com the Agile brand is produced by Missing Link, a Latina owned, strategy driven, creatively fueled production co op. From ideation to creation, they craft human connections through intelligent, engaging and informative content. Until next time, stay curious and stay agile.

[Jamie Domenici]

The Agile Brand.

[Greg Kilstrom]

Before we continue, I wanted to share a key strategic resource that a majority of the Fortune 500 are already aware of. Finding the best technology, business and talent solutions is not easy. With business demands and competitive pressures mounting, you need to be able to design, deploy, and optimize your technology to provide leading customer experiences while driving business growth. Those of you that have been listening to this show for a while know that this podcast is brought to you by Tech Systems, a global provider of technology, business and talent solutions for more than 80% of the Fortune 500. Tech Systems accelerates business transformation for their customers. Whether you're looking to maximize your technology roi, drive business growth, or elevate customer experiences, Tech Systems enables enterprises to capitalize on change. Learn [e-mail] that's teksystems.com now let's get back to the show.