🫣 Andrew Faris shows you the dark side of subscription LTV

🤑 Cody Plofker shares his favorite paid channel right now

🧐 Sean Frank with the five hardest ecommerce jobs to hire

And, the top five headlines in consumer.

Andrew Faris Founder, AJF Growth

The Dark Side of Subscription LTV

Every operator wants to build the perfect ecom business:

• High margin
• High LTV
• High TAM
• Low CAC
• Low OpEx

Subscription seems like the holy grail.

Brands will build their entire growth strategy around maximizing subscriber rate. They’ll spend aggressively on first purchase and justify it with LTV.

But this playbook has some holes in it. There’s a better way.

 High Retention ≠ High LTV:CAC 

Looking at cohort data across multiple subscription brands, I’ve seen a surprising pattern.

The cohorts with the highest retention rates are often not the cohorts generating the best LTV:CAC. In some cases, there’s even a negative correlation.

There are a few reasons for this.

First, CAC

Say you spend $100 and acquire two customers.

• One subscribes
• One buys one time

Your dashboard shows a $50 blended CAC. But you didn’t pay $50 for each of them.

You probably paid $75 for the subscriber and $25 for the one-time buyer. High-retention cohorts stay longer, but they cost dramatically more to acquire.

Look at this anonymized data from a subscription brand: the blue-highlighted cohorts were acquired with subscription-focused funnels, and consistently had +30% higher CAC.

When it comes to the three-way teeter totter of CAC, LTV, and AOV … you can’t have your cake and eat it, too.

This can be seen at both extremes.

DTC Midas shared on X that when they pushed hard on CRO and AOV, they raised revenue per session, but Meta started optimizing for higher spenders, which made their addressable audience smaller.

CAC climbed to unmanageable levels.

This is a slightly different example of the same principle. It costs more money to get someone to commit to more. Of course, this can be worth it. But it often isn’t. Tread carefully.

Second, LTV

The whole premise of the subscription playbook is subscribers generate higher LTV.

And sure, they do come back more often and stay longer.

But who cares?

A subscriber who generates $300 LTV and costs $150 is worth less to your business than a one-time buyer who generates $200 LTV and costs $25.

In fact, high AOV customers tend to have better LTV than you’d expect. They buy more on first purchase and often they buy more on future purchases, too.

Even at a lower retention rate, high AOV customers compound in a way that can match or even outpace a subscriber buying at a discount every month.

Third, Convergence

You’ll only notice this if you’re close to the data for a long period of time.

Non-subscribers starts to look eerily similar to the subscribers.

Look again at the anonymized data.

The blue months with subscription-focused funnels seemed to work great at first: the retention rates in the first couple months were much higher than previous cohorts.

But look what happens by Months five and six: the retention rates converge on each other.

The reason is simple.

Regardless of if they are a subscriber or not, the free market is at work here. Customers stop buying what they don’t want (or already have too much of). They keep buying what they need.

• The subscriber churns
• The non-subscriber stops buying

Same outcome, different mechanism.

Most importantly, different acquisition cost.

When a brand hammers ad spend to get more subscribers, what they’ve often done is spend a lot more money to temporarily inflate retention behavior that was going to normalize anyway.

If you have a great product that makes a difference in someone’s life, they’ll buy it again (and again). Some of them will subscribe. Others will just come back when they need more.

Either way, the value drives the behavior.

And if you say otherwise, you’re dangerously close to saying, “Subscription is great because it tricks people to keep buying what they don’t want or need.”

That’s not a good long-term business plan.

 There’s a Better Way 

To be clear, I’m not saying subscription doesn’t work. It does … for the right products, in the right categories, with the right economics.

But this assumption is not always true:

The brands running that playbook aggressively are often burning a lot of cash to find that out.

The harder, more nuanced reality is that acquisition funnels are a series of tradeoffs, and elite operators pay attention to all of them.

Here are three things to consider.

1. Aim For 1x+ ROAS

Raise AOV, keep a close eye on your CAC, and try to get first-order profitable.

Landing at a 1.1x ROAS with meaningful AOV is dramatically better for cash flow (way less risky!) than operating at 0.6x ROAS while waiting 9 months for subscription LTV to bail you out.

If you have multiple SKUs, there’s usually a bundling opportunity.

• Sell 12-packs
• Build discovery bundles
• Create starter kits

A good example of this is Billie, the woman’s subscription razor brand. It offers a bundled starter kit for the kick-off to its subscription, and then redirects to an “upgrade your routine” page after you add to cart.

2. Test Your Unknowns

Most brand’s subscription economics are a blended average.

Because of that, they don’t know their true subscriber CAC, whether their high-retention cohorts are profitable, or whether their subscription discount is paying for itself.

I like how Drew Fallon put it …

So how do you know if subscription makes sense for your brand?

Run split tests. Wait long enough to see the full picture.

Test an AOV-offer against a subscription-discount offer. Watch the retention curve. Early data will typically flatter the subscription cohort. Six-month data is where the truth lives.

Most brands stop the clock too early.

Or never start it in the first place.

3. Know Your Category

Cherene Aubert shared a story about when she ran growth at Bobbie, the baby formula brand.

When the formula shortage hit in 2022, Bobbie had to slow down demand.

Their team dialed back every marketing lever — ads, emails, flows, partnerships, all of it. But demand kept coming.

Then they pulled their trial offer. Demand cut in half immediately.

The reason the trial offer worked so well for Bobbie is specific to baby formula.

Parents need to know their baby tolerates a formula before they commit to a subscription. The feedback mechanism is fast and unmistakable.

So a two-can trial that leads into a subscription is a perfect fit for that category and that customer relationship.

Supplements are close to a perfect subscription product for similar reasons — you take one every day, the replenishment cycle is built in, and if it works, you want it to just show up.

Beauty is different; you need to experience it first, which is why Sephora has testers.

Food and beverage? Get samples in people’s hands.

Wallets? You’re not subscribing to a wallet (sorry, Sean).

The offer structure needs to match how the customer actually buys in your category. Subscription is only one tool amongst many.

 Just Remember This … 

An offer is primarily two things: product and price.

Everything else — bundles, free shipping thresholds, subscribe-and-save discounts, trial periods — is a variation on those two levers.

This is the only question that matters when you’re constructing an offer:

Answer that as best you can. Then go test it.

Andrew Faris has been growing ecommerce brands for 12 years. He’s the Founder and CEO at AJF Growth, a full service agency that scales $5M brands to $50M profitably. Connect with him on Twitter.

Cody Plofker CEO, Jones Road Beauty

My Favorite Ad Channel

What’s working right now for us:

• CTV
• Demand Gen/Youtube
• Podcasts
• Axon (Applovin)

That last one is one of my favorites.

It’s the S&P 500 mobile gaming ad platform that has become one of our most successful channels.

The cool thing about Axon is you don’t have to shoot new creative or go find any new agencies.

Take 9x16s that are working on your main channels, port them over, go hard on direct-response (full-screen, audio-on, mostly unskippable ad units), and generate interactives from inside Axon for your CTAs.

Plus, if you use this Operators’ link to create an Axon account and launch on day one, you’re going to get $1k in free ad credit + another $5k when you spend $5k.

• Audio-on vertical videos
• Unskippable ad units
• New reach for new customers

Sean Frank CEO, Ridge

Five hardest ecom jobs to hire, in order

Ridge does $200M/yr.

It took a decade to get here. It would have been terrible without the right team.

These five ecom jobs are the hardest to hire for- and they will make or break your entire business.

1- Head of Product

Product is everything.

Without product you don’t have ads, angles, or an offer.

The ability to create something new, that people want, over and over again- that’s the hardest thing in consumer.

Ridge has three verticals.

- Wallets
- Rings
- Travel

We are always trying to create new and interesting SKUs. Our NFL + MLB collection, Lone Wolf, Thunderbird, Hot Rod …

Great products make marketing’s job easy.

This person needs to spot trends and translate them into product.
​
​2- Head of Growth

The product hire is a unicorn.
You either have it or you don’t.

The head of growth is a financial problem.

The best heads of growth start their own brands (my Connor) or they start an agency.

You can’t peel my Connor away because …

1- we are best friends
2- he has 8 figures in equity

Would you give him 35% of your 8-figure brand?

No. So you have to hire someone worse for a lot of money.

$250k minimum, plus remote flexibility.

Like it or not-

That is the market for a rain maker right now.

3- Head of Amazon

Amazon is a million little jobs.

- listing
- SEO
- PPC
- reviews
- inventory

And it is a tribal knowledge industry. Only a handful of people know all the tips and tricks.

So same problem as head of growth-

If this person is elite, they start an agency.

4- Creative Strategist

Creative is the new targeting. You need thousands of new ads a year.

Who is going to make great creative at volume?

This is still a new job- and talent supply is slim. Expect to pay a $100k+ salary.

5- Head of Influencer

Very easy to suck at this job.

You get to build these relationships and give money to famous people.

It is just very easy to get soft.

- Overpay
- Undernegotiate
- Neglect ROI

You want someone who understands the creator world, but is not desperate to be accepted by it.

Former creator is usually the best move.

 Two teams crushing right now 

1- young, no life, 12 hour days, VERY SMALL TEAM, in office, 6 days a week, hustle hustle hustle

2- remote, everyone is an expert, fully autonomous, results driven high performance culture, fully embracing AI

No middle ground.

Choose your path. Hire accordingly.

THE FEED

​How to Structure Meta for Ecommerce Hyper Growth (Real Numbers)​

​What Every Ecommerce Advertiser Needs to Know: Meta AI in 2026​

​What 3 Ecommerce CEOs Got Wrong About Money & Business​

The Trends

Curated by the editor of CPG Wire, the five top stories in commerce and DTC.

1. Trek One Capital Acquires Two Plant-Based Brands: EIN​

Houston-based investment firm Trek One Capital acquired two plant-based brands — flax milk maker Good Karma Foods and protein bar brand No Cow. The deal brings both under Trek One’s umbrella alongside premium chocolate brand Alter Eco Foods.

No Cow was founded in 2015 and offers plant-based, low-sugar, dairy-free nutrition bars with 20 grams of protein each. Both brands sell through a mix of natural and conventional retail as well as DTC ecommerce.

2. Elavi Goes Nationwide at Whole Foods: Nosh​

Elavi is expanding nationwide at Whole Foods Market, less than a year after landing its high-protein, gluten-free, vegan brownies in select regions of the natural retailer.

The brand is also launching an exclusive SKU for the chain. Founded by Michelle Razavi and Nikki Elliott, Elavi’s brownies contain 11 grams of protein and 12 grams of fiber per serving and are sweetened with dates.

3. Phytolon Closes $23.6M Series B: PR Newswire​

Phytolon, an Israeli biotech company, closed a $23.6M Series B to commercialize its fermentation-based natural food colors in the US. The round was led by an undisclosed strategic investor, with participation from Millennium Foodtech, NextGen Nutrition, and Colorcon Ventures.

Earlier this year, the FDA approved Beetroot Red, Phytolon’s first fermentation-derived color. The funding will go toward scaling supply to CPG brands and distribution partners.

4. The DTC Graveyard: 50 Brand Failures: PR Newswire​

PR firm 5W released a report cataloging 50 prominent DTC brand failures between 2022–26 (including Outdoor Voices, Allbirds, Casper, and Bonobos) and identified the patterns behind nearly every collapse.

The most common predictor was paid-acquisition addiction. All 50 brands relied on Meta for the majority of customers and never built the retention infrastructure to survive. The second biggest predictor was the absence of any AI visibility plan.

5. WILDE Opens New Facility: Nosh​

WILDE Brands, known for its chips made with chicken breast, egg whites, and bone broth, opened a new manufacturing facility this week and announced plans to expand beyond its core chip line into a broader protein snacking platform. The brand has previously raised $20M in a round led by KarpReilly.

 Quick Life Hack 

Andrew Durot recently tagged me on Twitter. Actually, it’s be more accurate to say he called me out …

You might be thinking the same thing.

So I’ll tell you what I told Andrew:

Even better, I have a life hack for you … find something you love and believe in completely, then become the CEO of that thing.

That’s what I did! Relevant banger:

“The secret of life is to have a task, something you devote your entire life to, something you bring everything to, every minute of every day for the rest of your life. The most important thing is, it must be something you cannot possibly do.” — Henry Moore

With thanks and anticipation,
Aaron Orendorff
🤓 Chief Executive Officer

P.S. (Disclaimer): Special thanks to Axon by Applovin for sponsoring today’s newsletter.

​Read online | Unsubscribe​