The Situation
How a homeware brand discovered its largest marketing channel was acquiring the least valuable customers.
The agency reported 4.1x ROAS on Meta. Google Shopping showed 3.8x. Both looked healthy. But the business was not growing profitably — and the founder could not reconcile the reports with her bank account.
The Approach
GrowthBridge built a contribution margin model by channel — accounting for returns, fulfilment cost, and 12-month customer lifetime value. We then ran cohort analysis to understand repeat purchase behaviour by acquisition source.
12-Month Customer LTV by Acquisition Channel
12-month LTV
£81
CAC: £29
Google Shopping
£118
CAC: £6
Organic / SEO
Key Finding
Meta — the channel receiving the largest budget — was acquiring customers with a 12-month LTV of £54 against a CAC of £38. Net contribution: £16. Email customers, acquired at £4 CAC, had a 12-month LTV of £142.
The Recommendations
- 01Cut Meta spend by 40% and redirect to email acquisition — lead magnets, content, referral programme incentives.
- 02Build a 4-touchpoint post-purchase email sequence — the data showed email-acquired customers repeat at 3x the rate.
- 03Stop reporting ROAS as the primary channel metric — replace with 12-month contribution margin per acquired customer by channel.
The Outcome
The founder had been given an accurate picture of an incomplete story. ROAS measures what a channel returns on ad spend — not the quality of the customer it acquires. Once we mapped LTV by channel, the budget decision was straightforward.
Business names, individual identifiers, and certain operational details have been changed to protect confidentiality. The analytical methodology, data patterns, and strategic findings are real. Specific figures are indicative of the patterns identified.