
You're spending 60% of your budget chasing new customers and 40% nurturing existing ones.
You should flip that ratio.
Sound crazy? Let me show you the math that'll change how you think about ad spend forever.
The Allocation Mistake
Most DTC brands fall into the "new customer trap":
70% budget on prospecting
20% on retargeting
10% on retention
This works... until acquisition costs skyrocket and you're left with one-time buyers.

The Profitable Allocation Model
Here's how million-dollar brands actually spend:
🎯 40% - Prospecting (New Customers) Quality over quantity. Better to acquire fewer customers who stick around.
🎯 35% - Retargeting (Warm Audiences)
Your highest ROI spend. People who know you but haven't bought yet.
🎯 25% - Retention (Existing Customers) Your most valuable audience. Cheaper to sell to, higher AOV, better lifetime value.
The Channel Breakdown
Meta (50% of total budget):
30% Advantage+ Shopping
40% Custom audiences (retargeting)
30% Retention campaigns
Google (30% of total budget):
60% Branded search (protect your name)
25% Non-branded search
15% Display retargeting
Email/SMS (20% of total budget):
100% retention and reactivation
The LTV Reality Check
A customer acquired for $50 who buys once = $50 CAC A customer acquired for $75 who buys 3 times = $25 CAC
Stop optimizing for cheap acquisition. Start optimizing for profitable relationships.
The Weekly Budget Test
Track this for 30 days:
Revenue from new customers
Revenue from returning customers
Cost to acquire each
Most brands discover their "expensive" retention spend delivers their cheapest revenue.
Red Flag Warning
If more than 70% of your revenue comes from new customers, you have a retention problem disguised as a growth strategy.
Your move: What percentage of last month's revenue came from repeat customers?
