Price the second order in dollars, against customers with exactly two orders, then in payback months.
Your order file can price a second order in dollars. Pull average lifetime revenue for one-order customers and for customers with exactly two orders. The gap is the step-up: what one more order is worth per customer. Then restate it in payback months, the unit finance already uses for acquisition.
In the skincare file, customers with exactly two orders average $155 in lifetime revenue, against $66 for one-order customers. The step-up is $155 minus $66: $89 per customer converted. A two-order customer is worth 2.35 times a one-order customer.
Measure against exactly two orders, never two or more. The two-or-more average includes your heavy buyers, so it inflates the gap. A founder's finance lead will find that inside a day. The strict version is smaller, and it survives the meeting.
Multiply the step-up by the first row. The skincare file has 13,526 one-time buyers, and at $89 each that comes to about $1.2M. Label it the ceiling, if every one-time buyer ordered once more. A forecast rate turns the ceiling into an ask, and The Budget Ask builds that table.
Treat the $89 as an upper bound for customers you win back with an offer: it compares customers who came back on their own with those who didn't, and customers with bigger first orders may be likelier to return.
In this file the step-up was bigger than the average first order. In many DTC files it's smaller. In consumables, the first order carries the starter kit or the bundle, and the reorder is one refill. The step-up is still the number you price. It's smaller, and the third order matters more.
For example, take a brand whose first order is a $90 kit and whose reorder is a $40 refill. Its step-up is about $40, so the cost of winning that reorder has to sit well under $40. Its profit arrives on the third and fourth orders, so timing the reorder matters more than discounting it.
Price orders in contribution, because revenue hides what each order costs to deliver. Contribution, everywhere in this book, means revenue less cost of goods, shipping, fulfillment, payment fees and the discount.
Take an invented brand: a $50 order, 60% product margin, $8 of shipping, fulfillment and fees per order, and a $40 acquisition cost. The first order contributes $22 and cost $40, so each new customer arrives $18 underwater. Every later order contributes $22. The business is paid on the second order, not the first.
In the invented brand, a second order from a one-time buyer contributes $22 with no new acquisition cost against it. You already paid for these customers, which is why the step-up belongs in the same meeting as the media plan.
Finance judges acquisition in months, so give them the second order in the same unit. Your payback month is the first month in which cumulative contribution per acquired customer reaches acquisition cost. Cut it by acquisition cohort and by entry product, because a blended payback month hides the same two populations a blended average does.
Continue the invented brand. Each customer starts $18 underwater. Each repeat order contributes $22, so a cohort needs about 0.8 repeat orders per acquired customer to pay back: $18 divided by $22 is 0.82. Say a cohort averages 0.4 repeat orders by month six, 0.8 by month thirteen and 0.9 by month fourteen. Payback is month fourteen, the first month its cumulative contribution clears $40.
Build it from your cohort table. For each acquisition month, add the contribution from every order to date. Divide by the customers acquired that month. The payback month is the first month that running total reaches what you paid per customer. A cohort too young to get there stays blank until it does.
The month tells you what the business can carry. For example, your cash plan tolerates twelve months and payback lands in month fourteen. You have two ways to close the gap: cheaper acquisition, or second orders that arrive sooner and more often. Entry product moves the month too, because some first products bring customers back and others rarely do.
Chassis For Men, a men's grooming brand, ran at a roughly $8 customer acquisition cost against an $82 average order (platform-reported), so it paid back on the first order. A brand in that position grows on first orders and banks the second. Most consumable brands sit closer to the invented one, where the second order sets the payback month.
Cut by entry product, payback shows which first products earn back their acquisition cost and which lean on the second order. That cut goes to the media meeting as Cost per Returner.
Pull the exactly-two row. If its average is under one and a half times your one-order average, the second order won't carry the business alone. Price the third order the same way before you fund a program on the second.
This is one chapter of The Second Order, which is free and readable in full on a single page with no form in front of it.