E012: How to Profit While Losing Money on First Order Ad Costs

How much can you spend on a customer when the first order loses money?

Mike Beckham (CEO, Simple Modern) walks Matt Bertulli (Founder, Pela Case & Lomi), Cody Plofker (Advisor & fmr. CEO, Jones Road Beauty) and Curtis Christopherson (Chief Growth Officer, Ammortal) through the profit model behind consumable brands, using Trevi’s retention data. He measures every customer three ways.

1. Lifetime Value: Profit per customer over 6 months

2. Net LTV: LTV minus what you paid to acquire them

3. Nominal LTV: Net LTV times customers acquired

Winks just pushed its CAC under $100. Mike shows why few brands earn $100 back from a customer in six months. Then the hosts split on forcing subscriptions, and Mike warns that longer paybacks have bankrupted brands.

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Richpanel

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Chapters

00:00:00 Durables Pay Upfront

00:05:38 Scaling Below 1 ROAS

00:14:52 Pick Your First Channel

00:22:56 Trusting Product to Win

00:27:47 Why Brands Force Subs

00:31:21 Trevi Retention Curves

00:38:14 Heartbeat Days & TikTok

00:44:25 Sub vs One Time Offer

00:51:11 No Sub Before Tasting

00:56:44 Agents vs Hard Cancels

01:02:03 3 Ways to Calculate LTV

01:11:49 Top 10% Pays the Bills