Steven Pope

Was this idea of customer acquisition cost and customer lifetime value with your idea of the first order and somebody who purchases from you one time is not considered a customer.

And the reason for that is again, unit economics of scale.

Yes, somebody buying from you one time

has technically become a customer.

But if you're truly thinking about the idea of something like your customer lifetime value, somebody buying from you once is nothing, right?

That person is still a prospect because that is a direct one-to-one almost for customer acquisition costs, customer lifetime value.

Most people on average and most brands on average usually break even or are losing money on first order for CPG type brands.

So likely that is also you.

And so you're probably looking at that and thinking, yeah, I have to have somebody purchase at least two to three times.

Perfect.

Okay.

So now that we are in that, we have to be looking at unit economics of scale for specifically things like your customer acquisition costs.

Your customer acquisition costs, you need to break into specific customer segments, right?

So what is that first purchase customer acquisition cost?

What is that second purchase going to cost you?

What is the third, right?

Each one of them is going to cost in a different way, likely being less and less over time, but understanding the ratios of your lifetime value to your customer acquisition costs will greatly help you understand how to actually maneuver in the market

moving forward.

So that is the most important thing.

And the thing that I see brand owners just fail at so often because they get so hung up on the idea of profitability and needing to squeeze out every single penny that they possibly can to the point that they just drive their brand into the ground.