Episode Summary
In this mini episode of the Free to Grow CFO podcast, Jon Blair discusses the concept of LTV (Lifetime Value) in the context of DTC brands, emphasizing its importance in measuring customer value over time. He highlights common misconceptions about LTV, particularly the confusion between LTV and LTR (Lifetime Revenue), and stresses the need to measure LTV in margin dollars rather than revenue. Jon also explains the significance of time-bound LTV and its role in assessing profitability against customer acquisition costs (CAC).
Key Takeaways:
-LTV is the cumulative value that a customer represents to your brand over time.
-LTV should be measured in margin dollars, not total revenue.
-LTV must be time-bound, expressed in specific time frames.
Episode Links
Jon Blair - https://www.linkedin.com/in/jonathon-albert-blair/
Free to Grow CFO - https://freetogrowcfo.com/
Transcript
00:00 Understanding LTV: Definition and Importance
03:14 Measuring LTV: Common Mistakes and Correct Approaches
04:59 Using LTV for Business Decisions: Profitability Assessment
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Episode Summary
In this mini episode of the Free to Grow CFO podcast, Jon Blair discusses the concept of LTV (Lifetime Value) in the context of DTC brands, emphasizing its importance in measuring customer value over time. He highlights common misconceptions about LTV, particularly the confusion between LTV and LTR (Lifetime Revenue), and stresses the need to measure LTV in margin dollars rather than revenue. Jon also explains the significance of time-bound LTV and its role in assessing profitability against customer acquisition costs (CAC).
Key Takeaways:
-LTV is the cumulative value that a customer represents to your brand over time.
-LTV should be measured in margin dollars, not total revenue.
-LTV must be time-bound, expressed in specific time frames.
Episode Links
Jon Blair - https://www.linkedin.com/in/jonathon-albert-blair/
Free to Grow CFO - https://freetogrowcfo.com/
Transcript
00:00 Understanding LTV: Definition and Importance
03:14 Measuring LTV: Common Mistakes and Correct Approaches
04:59 Using LTV for Business Decisions: Profitability Assessment
Episode Summary
In this episode of the Free to Grow CFO podcast, Jon Blair and Jeff Lowenstein discuss common finance myths in the DTC (Direct-to-Consumer) world. They focus on three main myths: the necessity of a 13-week cash forecast, the need for overly granular financial projections, and the advantages of working with e-commerce specific firms over horizontal firms. The conversation emphasizes the importance of understanding the purpose behind financial models and forecasts, advocating for a more strategic and less rigid approach to financial planning in the e-commerce space.
Key Takeaways
-You Don’t Always Need a 13-Week Cash Forecast
-Granularity in Financial Models Should Serve Decision-Making, Not Complexity
-Ecom-Specific Finance Firms Deliver More Value Than Generalist Firms
Episode Links
Jon Blair - https://www.linkedin.com/in/jonathon-albert-blair/
Jeff Lowenstein- https://www.linkedin.com/in/freetogrow-jeff/
Free to Grow CFO - https://freetogrowcfo.com/
Meet Jeff Lowenstein
Jeff was previously leading M&A efforts at ecommerce aggregator Boosted Commerce where he was the 5th employee. He built processes across M&A, finance and operations to support rapid growth from 0 to 30 brands under management in 2.5 years.
He previously co-founded and exited an app for Shopify merchants and spent time in the Strategic Finance departments of Etsy and Caesars Entertainment. Jeff holds a BA from the University of Pennsylvania and an MBA from Harvard Business School.
He’s worked with hundreds of brands over his career and founded Free To Grow because of his passion for supporting entrepreneurs and helping them succeed. The analytical and financial tools he has developed over the years are specifically crafted for the modern consumer brand.
Transcript
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00:00 Introduction to DTC Finance Myths
01:29 Myth 1: The 13-Week Cash Forecast
12:38 Myth 2: Need for Granular Financial Projections
26:49 The Importance of Financial Modeling
30:06 Myths in Financial Forecasting
31:05 E-commerce vs. Horizontal Firms
39:15 The Value of E-commerce Expertise
44:57 Leveraging Network and Experience
48:00 Closing Thoughts
The Free to Grow CFO Podcast
Episode Summary
In this mini episode of the Free to Grow CFO podcast, Jon Blair discusses the concept of LTV (Lifetime Value) in the context of DTC brands, emphasizing its importance in measuring customer value over time. He highlights common misconceptions about LTV, particularly the confusion between LTV and LTR (Lifetime Revenue), and stresses the need to measure LTV in margin dollars rather than revenue. Jon also explains the significance of time-bound LTV and its role in assessing profitability against customer acquisition costs (CAC).
Key Takeaways:
-LTV is the cumulative value that a customer represents to your brand over time.
-LTV should be measured in margin dollars, not total revenue.
-LTV must be time-bound, expressed in specific time frames.
Episode Links
Jon Blair - https://www.linkedin.com/in/jonathon-albert-blair/
Free to Grow CFO - https://freetogrowcfo.com/
Transcript
00:00 Understanding LTV: Definition and Importance
03:14 Measuring LTV: Common Mistakes and Correct Approaches
04:59 Using LTV for Business Decisions: Profitability Assessment
