Ann: CTT delivers record H1 FY22 result, beating its FY21 result, page-83

The clear mistake most are making is not understanding the difference between CLTV customer life time value and CAC Customer acquisition costs.

The CAC increased because Cettire has ramped up advertising expenses in last couple of months of the year. There aim was to put the brand infront of as many customers as possible during the peak season for fashion sales.

What many investors seem to be projecting is that CAC will remain this high. It won’t as once the brand is well known less money is required on acquiring new customers. Cettire mentioned in the call they have been trying different methods of capturing customers and looking to ramp up social media engagement as I mentioned a month or so ago.

Now this brings me to the other part of the equation CLTV customer life time value. This refers to how much customers spend not just once but over the whole time they use Cettire to purchase from be it a one off purchase or a regular customer. From the presentation we can see that repeat customers are increasing they make up 46% of all orders. This is good news because you’re not paying CAC again for repeat customers. And the more they purchase the higher the life time value of that customer becomes. ( higher returns on investment)

I mentioned last week Cettire was now replying to questions on Instagram. This is obviously the next step of providing better customers service to keep the customers which you’ve outplayed CAC on. The more loyal you can make these return customers the greater CLTV and greater return you achieve on cac.

So again since the big spend on customers only began in the last few months of 2021 we won’t see the return on cac or CLTV for another 3 to 6 months.

We know Dean has turned down advertising spend in January it’s roughly a quarter of what it was in Nov-Dec so now we will get an indication of how successful the customer acquisition has been and whether cettires offering is developing customer loyalty.

So basically its too early to tell, but repeat customers increasing to 46% is a positive if it was going the other way I’d be very worried.