I say this often, so at this point I hope everyone knows that a small slice of customers typically drives most of the profit for an e-commerce business.
You've probably seen the stat too, something like 20% of buyers generating 70% of revenue. Here's what I find really interesting though...
If you watch how most brands actually spend their customer acquisition dollars, you'd draw the conclusion that they don't know this. They optimize for volume. They celebrate new orders. They chase blended CAC targets as if all customers are created equal.
But, of course. They're not.
So what separates brands that scale profitably from brands that just... scale?
They Think About Acquisition Differently
I have noticed that the teams of top CEOs & CMOs whose companies are scaling profitably put a different lens on acquisition. Here is how they think differently:
1] They know a customer base follows a power law. A small minority of customers generating a disproportionate share of value. That powerful yet small group buys more often, churns less, and rarely needs a discount to convert. These aren't just "better customers" they're a different species entirely. The long tail, meanwhile, costs almost as much to acquire but never shows up again. Treating both groups the same isn't just inefficient. It's mathematically expensive.
2] Acquisition is the best touch to create another top 20% customer. For example, $60 CAC for someone who behaves like your best customers is a steal. A $30 CAC for someone who sits in the long tail, never reorders, or only responds to 40% discount emails? That turns out to be a slow-moving disaster disguised in attractive CAC.
3] They treat best customers as a data set, not a vibe. They can describe top customers quantitatively: which channel is their first touch, what products they start with, how fast they get to order two, their return rate, and discount sensitivity. They have this profile down. If you can't pull this profile in five minutes, creating more of the customer you need is very challenging.
4] They see most retention "problems" as acquisition problems. They know retention starts with acquisition and no amount of clever Klaviyo flows will fix the core issue of bad customers. They acquire with a mindset that retention rates skew more "nature" than "nurture”.
They know difference between scaling and scaling profitably usually comes down to this: who you're acquiring, not how many.
From Insight To Execution
Taking insight back into how you operate is the hardest part. So, here's is where I would begin this quarter to start making impactful changes:
Build a "Top 20%" segment that everyone can see. By contribution margin or 12-month LTV, not just revenue. Tag them as a distinct segment. Make sure marketing and finance know who sits in that bucket.
Reverse-engineer their acquisition paths. Which channels first touched them? Which products did they start with? What discount profile did they see? How fast did they hit order two? Put this in a simple table
Rebuild your audiences around them. Sync your top segments as primary seeds for lookalikes. Build explicit exclusions for low-value profiles. Start training marketing platforms.
Start reporting on the 20%. Add a section to your monthly deck. Report on revenue and profit from this segment, new entries, CAC, payback for the group. Shift the conversation from "more customers" to "more of the right customers."
At the end of the day, the difference isn't better creative, it's knowing exactly who you're trying to acquire so you can replicate it.
-Alex
Want more? Read the full LTV playbook
Want a sanity check on your own top 20%? Who they are, how to define them, and how to find more of them. Reply "TOP20" and I'll tell you where I'd start in your data.
