A premium perishable goods brand with a high AOV, loyal repeat customers, had built their entire paid media strategy around a 6x ROAS target. On the surface it looked great. The dashboard was clean. The numbers were hitting. The problem was one metric was driving the entire strategy. The ROAS was being measured on the first transaction only. The platform had no visibility into what happened after that purchase. And in a category where customers reorder 1.7 times per year at an average order value of $300, the first order is only ever part of the story.By optimizing exclusively to first-order ROAS, the brand was systematically underbidding on customers who were worth significantly more than the platform knew.
When you account for repeat purchase behaviour, the economics look completely different:
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A customer acquired at 6x ROAS on a $300 order generates $50 in ad cost
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That same customer reorders 0.7 more times — generating an additional $210 in revenue at zero incremental acquisition cost
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Their true 12-month value is $510, not $300
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This means the brand could profitably acquire customers at a 3.5x first-order ROAS and still achieve a 6x true ROAS on LTV
The 6x ROAS target wasn't protecting profitability — it was artificially capping the customer acquisition funnel.
When you account for repeat purchase behaviour, the economics look completely different:
-
A customer acquired at 6x ROAS on a $300 order generates $50 in ad cost
-
That same customer reorders 0.7 more times — generating an additional $210 in revenue at zero incremental acquisition cost
-
Their true 12-month value is $510, not $300
-
This means the brand could profitably acquire customers at a 3.5x first-order ROAS and still achieve a 6x true ROAS on LTV
The 6x ROAS target wasn't protecting profitability — it was artificially capping the customer acquisition funnel.
WHAT A STRATEGIC REVIEW UNCOVERED
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First-order ROAS was being used as the primary success metric — with no LTV visibility
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Bid strategies were trained to avoid high-intent audiences because the first purchase 'looked expensive'
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The brand was leaving its most valuable customer segment on the table by capping bids prematurely
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A shift to LTV-aware bidding with a 3.5x first-order ROAS target unlocked meaningful budget capacity — at equivalent or better true profitability
Fantastic experience working with Lorri, she is responsive, thinks very holistically. . .and is on top of all the new developments.
Nov 2022 - Mar 2024
