So I simplified it here but I usually distinguish between CM1 and CM2 where CM2 is less marketing expense. My general feeling is that marketing is a variable expense if it goes up with volume which includes a large share of most marketing budgets. That being said I mostly suggest CM1 for LTV calculations.
Great read!
Wondering why you include acquisition costs in the contribution margin when they are closer to fixed expenses rather than variable / COGs? Thanks!
So I simplified it here but I usually distinguish between CM1 and CM2 where CM2 is less marketing expense. My general feeling is that marketing is a variable expense if it goes up with volume which includes a large share of most marketing budgets. That being said I mostly suggest CM1 for LTV calculations.