The temptation
Assume a customer is worth three orders, set a target three times higher, and scale confidently. When the repeat rate turns out to be lower, you have spent months buying customers at a loss.
Do it properly
- Measure actual repeat rate by cohort, not by hope.
- Use a conservative horizon — what happens in 90 days, not a theoretical lifetime.
- Account for churn and refunds.
- Check cash flow: paying today for revenue arriving over six months is a funding question as much as a marketing one.
What to tell the bidding
Where possible, pass a conversion value reflecting realistic near-term value rather than first-order revenue. Where you cannot, keep bidding to first order and hold the extra margin as upside.