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5 Metrics Every DTC Brand Needs To Scale Profitably
Most DTC founders don't know how long it takes for a dollar spent on ads, inventory, and overhead to come back as cash. And because of that, most decisions are based on guesses instead of data.
This episode walks through the five metrics that tell you what's actually happening in your business, and why the ones most DTC founders rely on give an incomplete, expensive picture.
In This Episode:
• Why ROAS is only a signal, not a decision-making tool, and the one adjustment that makes it actually useful
• How to calculate Contribution Margin-adjusted ROAS (CM-ROAS) and why the gap between it and plain ROAS is usually where the money goes missing
• Why Lifetime Value (LTV) is almost always calculated wrong, and how to fix it so you know what you can actually afford to spend per customer per channel
• How to calculate your Allowable Customer Acquisition Cost (ACAC) using real numbers instead of gut feel or agency benchmarks
• What Capital Return Velocity (CRV) is, how to calculate it for a physical product business, and why most founders are genuinely shocked when they see the real number
Timestamps
0:00 - Why ROAS tells you almost nothing
6:12 - Unit economics and contribution margin
14:28 - CM-ROAS: the metric that replaces ROAS
19:45 - Lifetime value by channel and timeframe
24:10 - Overhead per customer and your ACAC
28:33 - Capital Return Velocity explained
Free Stuff
Want to see how your profit model stacks up? Try my FREE profit model analyzer and discover your fastest path to doubling your profit and cash flow: https://tools.scaleadvisors.com/pma
Get My Book
Love the podcast? You'll love my #1 best-selling book, The Scalable Profit Model, even more. Snag a copy for free at https://ScaleAdvisors.com/book (just pay S&H).
Work With Me
If you're doing $1M+ and want my help growing faster, with more profit, more cash flow, and less stress, visit https://ScaleAdvisors.com/services
Get Some Good Karma
If you enjoyed this episode, please take a second and subscribe, leave a review, and tell a friend. That helps spread the word, helps others, helps me, and gives you some good karma.
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By Jeremy ReevesMost DTC founders don't know how long it takes for a dollar spent on ads, inventory, and overhead to come back as cash. And because of that, most decisions are based on guesses instead of data.
This episode walks through the five metrics that tell you what's actually happening in your business, and why the ones most DTC founders rely on give an incomplete, expensive picture.
In This Episode:
• Why ROAS is only a signal, not a decision-making tool, and the one adjustment that makes it actually useful
• How to calculate Contribution Margin-adjusted ROAS (CM-ROAS) and why the gap between it and plain ROAS is usually where the money goes missing
• Why Lifetime Value (LTV) is almost always calculated wrong, and how to fix it so you know what you can actually afford to spend per customer per channel
• How to calculate your Allowable Customer Acquisition Cost (ACAC) using real numbers instead of gut feel or agency benchmarks
• What Capital Return Velocity (CRV) is, how to calculate it for a physical product business, and why most founders are genuinely shocked when they see the real number
Timestamps
0:00 - Why ROAS tells you almost nothing
6:12 - Unit economics and contribution margin
14:28 - CM-ROAS: the metric that replaces ROAS
19:45 - Lifetime value by channel and timeframe
24:10 - Overhead per customer and your ACAC
28:33 - Capital Return Velocity explained
Free Stuff
Want to see how your profit model stacks up? Try my FREE profit model analyzer and discover your fastest path to doubling your profit and cash flow: https://tools.scaleadvisors.com/pma
Get My Book
Love the podcast? You'll love my #1 best-selling book, The Scalable Profit Model, even more. Snag a copy for free at https://ScaleAdvisors.com/book (just pay S&H).
Work With Me
If you're doing $1M+ and want my help growing faster, with more profit, more cash flow, and less stress, visit https://ScaleAdvisors.com/services
Get Some Good Karma
If you enjoyed this episode, please take a second and subscribe, leave a review, and tell a friend. That helps spread the word, helps others, helps me, and gives you some good karma.