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
Mini Episode: The Danger of Using a Blended ROAS Target
The Free to Grow CFO Podcast
4 minutes 55 seconds
7 months ago
Mini Episode: The Danger of Using a Blended ROAS Target
Episode Summary
In this mini-episode of The Free to Grow CFO Podcast, Jon Blair breaks down a common mistake he sees in DTC brand financial strategy: relying on a blended ROAS target to guide monthly ad spend. While a blended ROAS might appear to show healthy contribution margins, it can actually mask losses on new customer acquisition—especially when repeat customer revenue is propping up the numbers.
Jon walks through how to break down contribution margin by customer type and why attributing ad spend correctly is essential for truly understanding performance. This episode is a must-listen for founders who want to scale profitably and avoid misleading metrics.
Key Takeaways:
-Using a blended ROAS target can be misleading.
-It's essential to separate new and repeat customer contribution margins.
-Communicate specific targets for new customer acquisition to ad buyers.
Episode Links
Jon Blair - https://www.linkedin.com/in/jonathon-albert-blair/
Free to Grow CFO - https://freetogrowcfo.com/
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
