Lesson 2 of 6
AOV, CVR, CPA and ROAS — the numbers every fitness founder must know
Learning objectives
- Define AOV, CVR, CPA, ROAS, CTR, CPC, LTV
- Connect ad performance to gross margin
- Calculate a maximum affordable CPA
- Stop judging ads in isolation
The acronyms, decoded
AOV: average order value. CVR: conversion rate (visitors → buyers). CPA: cost per acquisition or purchase. ROAS: return on ad spend (revenue ÷ ad spend). CTR: click-through rate. CPC: cost per click. LTV: lifetime value.
Founders quote ROAS like it means profit. It doesn't. ROAS is a revenue ratio — it ignores your gross margin.
How they connect
AOV £50, gross margin 60% → gross profit per order £30. If CPA is £25, only £5 is left before overhead. If CPA is £40, the order loses money even at a 'ROAS of 1.25x'.
You cannot judge an ad's performance without knowing the margin of what it's selling.
Max affordable CPA
A simple rule: Max CPA ≤ Gross profit per order − Required profit buffer. If your gross profit per order is £30 and you need £10 of buffer for overhead and profit, your max CPA is £20.
Founder insight — Derrick Twum
Most fitness brands that 'fail at ads' don't actually have an ad problem. They have a margin problem dressed up as an ad problem.
Key takeaway
ROAS is revenue. Margin is survival. Always do the maths in the same sentence.
Reflection questions
- 1Do you know your true AOV and CVR right now?
- 2What is your max affordable CPA on your best-selling product?
- 3What is the one number you most need to improve in the next 30 days?
Action task
Calculate AOV, gross profit per order, and max affordable CPA for your main product or service.
Worksheet
Work through these prompts. Answers save to this device.
Answers are saved to this device only. Cloud sync coming soon.
Related MEM tools
- Max CPA Calculator
- AI Ad Creative Generator