The Customer-Led SKU Trap
đ§ Why âgiving people what they ask forâ quietly kills margins, and scale, Media Buyer Index of the Week, and more!
Howdy Readers đ„°Â
In this newsletter, youâll find:
đ§ The Customer-Led SKU Trap
đ Paid Media Metrics Shift: Key Takeaways for Smarter Budget Moves
đ Ad of the Day
If youâre new to ScaleUP then a hearty welcome to you, youâve reached the right place along with 50k+ CEOs, CMOS, and marketers. Letâs get into it, shall we? Oh! Before you forget, if someone forwarded this newsletter to you, don't forget to subscribe to our newsletter so you never miss out!
Together with The Shift
Knowing AI Isnât the Problem. Applying It Is.
Youâve read the articles. Watched the demos. But if itâs not improving how you work every day, whatâs the point
At The Shift AI, we donât teach AI like a concept. We turn it into execution
â
Build workflows that run 24/7 behind the scenes
â
Use AI to think through ideas and not just finish them
â
Learn to build systems that scale you, not just your output
This isnât surface-level AI knowledge. Itâs a deep performance built in 5 minutes a day.
Subscribe and get 2000+ tools, 300+ prompts, and free AI training courses. Make AI work to your advantage
đ§ The Customer-Led SKU Trap
Marketers obsess over customer obsession. But when SKU decisions are steered by surface-level requests, âmake a mango version!â, âI want this in beige!â you create a trap. One that looks like demand but doesnât convert to contribution margin or retention.
This is the Customer-Led SKU Trap: when you follow signals that feel like revenue but actually degrade your ability to scale profitably.
đŻ The Real Tax: FormatâStage Misalignment
Letâs break down what usually happens:
Customers request variations they think they want. Founders oblige. Sales pop. ButâŠ
Aesthetic-led SKUs often get stuck in one-channel wins (e.g., static-only, Pinterest-only).
Flavor or color SKUs often increase conversion friction at scale (choice paralysis).
Requested SKUs tend to have a lower repeat rate unless tied to routines or replenishment.
These SKUs donât bundle well. They donât ladder into LTV. They often donât get high CTRs on new cold audiences. In short, theyâre performance dead-ends.
đĄ What Looks Like Demand (But Isnât)
âPlease make X colorâ â low-risk interest, not high-commitment buying intent
âIâd love a 1-packâ â margin killer, not a volume unlock
âWhen is it back in stock?â â urgency â long-term value
âSaw this on TikTok!â â discovery â purchase
Operators misread novelty signals as scalable intent. Most requests are dopamine-driven, not dollar-backed.
đ A Better Lens: Contribution-Weighted Demand
Instead of tallying requests, score SKUs by margin Ă repeat rate Ă media performance. Ask:
Does this SKU increase attach rate?
Will this variation scale across creative formats (static, video, UGC)?
Can it be bundled easily in high AOV kits?
Does it unlock a new acquisition channel or just clutter the PDP?
The SKU isnât the product. The SKU is the growth mechanic.
â The Inverse Case Study
One brand ignored hundreds of requests for âmint flavor.â Instead, they built a Starter Trio Pack of their 3 best repeat-rate SKUs, no mint included.
The result?
+27% AOV
-15% CAC via bundling
+42% retention after 60 days
Because people donât want more choices. They want momentum.
đ§Ș Final Test
If youâre considering launching a customer-requested SKU, ask:
âWill this SKU increase retention, increase media efficiency, or increase LTV mechanics?â
If the answer is âno,â itâs a trap.
đ Why It Matters
The wrong SKU isnât just a bad bet. Itâs a sunk cost trap. Inventory burden. Ad inefficiency. Funnel friction.
Especially Q4âQ1, SKU discipline is everything:
It protects cash
It amplifies your best bundles
It ensures every new SKU compounds, not cannibalizes
Make margin-led decisions. Not applause-led blunders.
đ Paid Media Metrics Shift: Key Takeaways for Smarter Budget Moves
Ad spend remains heavily concentrated on Meta and Google, but this weekâs data shows clear signals on where costs, returns, and opportunities are shifting. These trends highlight where budget tweaks and creative adjustments can make the biggest impact.
The Breakdown:
1. CPC â Click Costs - TikTokâs CPC dropped 25.6%, making it the cheapest traffic source even though its CTR fell 15.6%, so refreshing creative and refining audiences there can help counter lower engagement, while Pinterest (+14.5%) and YouTube (+8.5%) saw rising costs that signal heavier bidding.
2. CAC â Customer Acquisition Cost - Googleâs CAC climbed 18.6% and Metaâs rose 8%, tightening profit margins while holding the largest budget share, adjusting funnel offers and moving a small slice of spend to channels with lower CAC, like Microsoft (-6.9%) or TikTok (-3.2%), can help keep overall acquisition costs stable.
3. ROAS â Return on Ad Spend - YouTubeâs ROAS slid 20% and Pinterest dropped 17%, while Microsoft posted a rare 5.8% gain and grew budget share by 9%, so tightening targeting and updating creative on Meta and Google can hold returns, while testing Microsoft for incremental gains.
With nearly nine out of ten ad dollars still flowing to Meta and Google, rising CAC and falling ROAS highlight the need for a smarter budget balance. The growing share for YouTube (+18%) and Microsoft (+9%) shows where fresh creative, better audience focus, and selective reallocation can protect ROI as competition intensifies.
đ Ad of the Day
What Works and Insights
1. Headline speaking to emotions and validation - The line âItâs not in your head. Itâs your hormones.â works because it acknowledges the customerâs lived experience and removes stigma. Brands can push this further by leaning into validating language in categories where people often feel misunderstood.
2. Visual storytelling through transformation - The split images, one showing discomfort, the other confidence, work as a before-and-after without heavy text. Brands can replicate this by pairing subtle visual contrasts that show outcomes, making the benefit tangible at a glance.
3. Authority badge as reassurance - Featuring âOB/GYN Foundedâ acts as a credibility shortcut that reassures buyers of legitimacy. In health or wellness, trust is often the main barrier to purchase. Highlight authority markers (founder credentials, clinical trials, expert partnerships) early in the creative to reduce friction.
This ad shows the power of combining emotional validation with authority. It doesnât just sell a product; it normalizes a conversation many women may feel alone in. For brands, this demonstrates how tackling stigma head-on, while pairing it with proof and trust signals, can both educate and convert at scale.
Advertise with Us
Wanna put out your message in front of over 50,000 best marketers and decision makers?
We are concerned about everything DTC and its winning strategies. If you liked what you read, why not join the 50k+ marketers from 13k+ DTC brands who have already subscribed? Just follow this.
At ScaleUP, we care about our readers and want to provide the best possible experience. That's why we always look for ways to improve our content and connect with our audience. If you'd like to stay in touch, be sure to follow us EVERYWHEREđ„°
Thanks for your support :) We'll be back again with more such content đ„ł