Stop Guessing: The 5 Metrics Every DTC Brand Must Master Before Scaling

A small business founder focused on his work at a bustling trade show, connecting with potential clients and expanding his network.

At T2 Consulting, we help early-stage and growth-stage consumer brands scale with confidence. And we’ve learned that brands who master these 5 KPIs—not just ROAS—are the ones that build long-term success.

1. Contribution Margin

This is the real MVP of your margin stack. Contribution margin accounts for product costs, fulfillment, and variable expenses—but excludes fixed costs. It tells you how much profit you have to fund marketing and operations.

Formula: (Revenue - COGS - Fulfillment - Transaction Fees) / Revenue

Target: 60%+ for most DTC products

Pro tip: Low contribution margins mean you’ll struggle to scale profitably, no matter how good your ROAS looks.

2. Blended CAC (Customer Acquisition Cost)

Founders often celebrate their paid media CAC—until they realize their blended CAC (including organic, email, referral, etc.) tells a different story.

Formula: Total Marketing Spend / Total New Customers Acquired

Why it matters: Your blended CAC tells you how efficiently your whole funnel performs—not just paid ads. And it gives a more honest snapshot of scalability.

3. LTV:CAC Ratio

The golden rule: spend $1 to make $3.

Formula: Customer Lifetime Value / CAC

Ideal Ratio: 3:1 or better

Warning: Brands that scale with a 1:1 ratio may grow revenue, but lose money on every new customer unless they drastically improve retention.

4. Payback Period

How long does it take to recoup your CAC?

Formula: CAC / Monthly Gross Margin per Customer

Target: 1–3 months

Why it matters: A long payback period slows cash flow and increases risk. A short payback period gives you the fuel to reinvest and scale faster.

5. Returning Customer Rate

Retention is cheaper than acquisition—but often under-reported.

Target: 25–40%+ depending on category

Bonus insight: Combine this with AOV (Average Order Value) to identify upsell or bundle opportunities that increase LTV without increasing CAC.

Conclusion: Metrics Make the Model

If you’re only watching ROAS, you’re flying blind. These 5 metrics give you a true, financial model-backed view of your brand’s scalability.

At T2, we help DTC brands unpack these numbers, apply them to real-world go-to-market strategies, and build sustainable growth engines.

Want the full checklist? Download our free DTC Playbook now and stop scaling on guesswork.