Profitability
Profitability measures the real return on your campaigns, accounting for ad spend, product costs, and other expenses. This helps you identify which campaigns and products are worth scaling and which are underperforming.
The basic formula to identify profitability is 'Profitability = Revenue – Costs'.
Beyond revenue and basic costs, consider:
Marketing efficiency – how well campaigns convert spend into sales
Refunds and returns – lost revenue and restocking costs
Discounts and promotions – lower per-sale margin
Operational costs – shipping, packaging, platform fees
These factors ensure your profitability numbers reflect real, actionable insights, not just raw revenue minus costs.
Engaging Return Customers
Repeat customers are often your most valuable. They spend more over time and cost less to convert. Tracking return customer behaviour allows you to:
Create retargeting audiences
Encourage repeat purchases
Improve customer retention and loyalty
Creating a cohort analysis is a powerful way to understand this behaviour. A cohort groups customers by when they first made a purchase (e.g., January customers, February customers), and tracks how many of them come back over time. By comparing retention across these cohorts, you can see how your marketing changes, product launches, or promotions impact repeat purchasing behaviour over weeks or months. This helps you identify true retention trends instead of looking at all customers as one undifferentiated group.
Customer Lifetime Value (CLV)
CLV shows the total value a customer brings over their lifetime. Understanding CLV lets you:
Focus on your highest-value customers
Optimise campaigns for long-term revenue
Inform strategies for upselling and retention