Product-Level Profit Management Using CPO, LTV and ABC
First written in FY2021-Q1. 11 of 25 entries say "Advanced", first in FY2021-Q3. Latest entry: 2026-10-20.
1 other company's latest entry also says "Restated".
- FY2026RaisedAnnual report
「Under this plan, the company has identified expanding the number of new customers acquired and improving LTV as key growth strategies. It will focus on these areas to contribute to business expansion while pursuing its mission of “raising the world’s QOL by 1% with surprisingly good products.”」
In addition to managing advertising profitability using CPO and LTV, the company elevated improving LTV to a key growth strategy under Medium-Term Management Plan 2028 and explicitly identified improving customer satisfaction, upselling, cross-selling and retention as priorities. - FY2026-H1ReframedAnnual report
「In line with the goal of increasing LTV, identified as one of the key growth strategies in the Medium-Term Management Plan 2028 announced on 15 July 2025, the company will not implement any new initiatives after the announcement date that are expected to increase the purchase rate but reduce LTV.」
In addition to the existing framework of using CPO and LTV to manage advertising investment profitability, the company elevated improving LTV itself to a key growth strategy under its medium-term management plan and expanded its focus to a policy of not implementing initiatives expected to reduce LTV even if they increase the purchase rate. - FY2025-H1RestatedAnnual report
「During the first six months of the consolidated fiscal year, the advertising investment balance remained at or below the optimal level of 1.00, but the number of new customers acquired declined. In the second quarter, the advertising investment balance was substantially below 1.00, but this was a temporary decline resulting from various initiatives. Going forward, the company will expand new customer acquisitions while maintaining the optimal advertising investment balance of 1.00.」
The company reaffirmed its policy of managing investment with 1.00 as the optimal advertising investment balance and expanding new customer acquisitions while avoiding excessive investment. - FY2025-Q1RestatedAnnual report
「During the first quarter of the consolidated fiscal year, the advertising investment balance remained at or below the optimal level of 1.00, but the number of new customers acquired declined. Going forward, the company will expand new customer acquisitions while maintaining the optimal advertising investment balance of 1.00.」
The company reaffirmed its management policy of expanding new customer acquisitions while avoiding excessive investment based on an advertising investment balance of 1.00. - FY2024-Q3RestatedAnnual report
「During the first nine months of the consolidated fiscal year, the advertising investment balance generally remained at or below the optimal level of 1.00. Although it exceeded 1.00 in some months, this was planned, as the creative department created new sales pages using different approaches and conducted numerous validation tests, temporarily increasing the proportion of unprofitable advertising expenses.」
The company reaffirmed its practice of using an advertising investment balance of 1.00 as the benchmark and, in principle, avoiding excessive investment while making planned, temporary excess investments when testing new sales pages. - FY2024-Q2AdvancedAnnual report
「During the first six months of the consolidated fiscal year, the advertising investment balance generally remained at or below the optimal level of 1.00, although it exceeded 1.00 in May and July 2023 in particular. This was planned: the creative department created new sales pages using different approaches and conducted numerous validation tests, temporarily increasing the proportion of unprofitable advertising expenses.」
While continuing to manage investment based on an advertising investment balance of 1.00, the company created new sales pages and conducted numerous validation tests. In May and July, planned testing investment temporarily pushed the balance above 1.00. - FY2024-Q1ReframedAnnual report
「Until the previous consolidated fiscal year, the company disclosed initial ROAS, which measured the amount of first-time sales generated by advertising investment. However, when the proportion of new acquisitions increases for products with low unit prices but high LTV (Note 3), allowing a high maximum CPO (Note 4), ROAS declines even though profitability has not deteriorated. As a result, initial ROAS did not always accurately represent investment efficiency. Because these factors need to be reflected in the advertising investment efficiency of a subscription model based on repeat purchases, from the first quarter of the consolidated fiscal year the company will disclose one-year ROAS (Note 5), which measures the sales expected to be generated by advertising investment over one year.」
The company revised the disclosure and management of advertising investment efficiency from a focus on initial ROAS to a focus on one-year ROAS, changing to a metric framework that reflects LTV and repeat purchases. - FY2023AdvancedAnnual report
「In both cases, the company increases advertising investment only when it expects new customer acquisitions within the maximum CPO, making future profit recovery likely. It therefore views the situation during the consolidated fiscal year positively.」
The company continued to increase advertising investment based on new customer acquisition within the maximum CPO, investing ¥3,414,543 thousand against the initial plan of ¥1,555,170 thousand. - FY2023-Q2RestatedAnnual report
「The company also strictly manages advertising expenses per order (CPO). When it can acquire orders at or below a CPO that is profitable within four months, it increases advertising investment; when the CPO becomes unprofitable within four months, it reduces advertising investment and limits the number of orders acquired.」
The company reaffirmed its practice of managing advertising investment based on CPO and LTV, deciding whether to increase or reduce investment based on profitability within four months. - FY2023-Q1AdvancedAnnual report
「During the first quarter of the consolidated fiscal year, the number of new customer acquisitions showed signs of recovery following improvements in the creative department, so the company raised the maximum CPO (Note 1) for some products to further increase new customer acquisitions.」
Following improvements in the creative department and the recovery in new customer acquisitions, the company raised the maximum CPO for some products to expand acquisitions further. It also continues to manage investment based on an advertising investment balance of 1.00. - FY2022RestatedAnnual report
「Although the number of new customer acquisitions declined during the consolidated fiscal year, the company did not overinvest in pursuit of near-term sales. As a result of working to maximize profits while maintaining the optimal advertising investment balance of 1.00, operating profit exceeded both the earnings forecast and the previous fiscal year.」
The company reaffirmed its policy of managing excessive investment and lost opportunities based on CPO, LTV, ROAS and an advertising investment balance of 1.00. - FY2022-Q3Temporary excessive investment associated with new-product testingAnnual report
「When the advertising investment balance exceeds 1.00, actual CPO is above the maximum CPO, indicating excessive investment. The reason the advertising investment balance substantially exceeded 1.00 in November 2021 was a planned, temporary increase in unprofitable advertising expenses for testing new products.」
While continuing to manage investment based on the advertising investment balance, the company explained that it temporarily increased unprofitable advertising expenses in November 2021 to test new products, causing the advertising investment balance to substantially exceed 1.00. - FY2022-Q2AdvancedAnnual report
「The advertising investment balance during the second quarter of the current fiscal year was close to its optimal value of 1.00, whereas it exceeded 1.00 in the same quarter of the previous year.」
After changing the ROAS calculation method, the company managed advertising using the advertising investment balance, which measures lost advertising opportunities and excessive investment, and the balance was close to the optimal value of 1.00 in the second quarter. It also indicated a policy of maximizing new customer acquisitions while maintaining the optimal level. - FY2022-Q1ReframedAnnual report
「From the first six months of the current fiscal year, the company changed the calculation method for ROAS (Note 3), a metric of advertising investment efficiency, to reflect actual conditions more accurately. However, because ROAS is used to compare responses between advertisements and between different periods for the same advertisement and has no optimal value, it is necessary to monitor the advertising investment balance (Note 5), a metric used to identify lost advertising opportunities and unprofitable investment.」
The company changed its ROAS calculation method and revised its metric framework to focus on its proprietary advertising investment balance, which measures lost opportunities and excessive investment, rather than relying on ROAS alone. The advertising investment balance moved close to its optimal value of 1.00, while the number of new customer acquisitions increased substantially. - FY2021AdvancedAnnual report
「Based on its extensive historical data, the company has the skills to calculate LTV accurately and uses it to calculate expected one-year ROI in relation to advertising and promotional expenses.」
The company described a system that uses expected one-year ROI, taking LTV, product profit margins and repeat-purchase rates into account, to evaluate advertising investment efficiency rather than relying solely on ROAS. It also continues to manage actual monthly ROAS and calculate the cap CPO. - FY2021-Q3AdvancedAnnual report
「Accordingly, these factors must be taken into account to obtain a more accurate understanding of investment efficiency. Expected one-year ROI (Note 7), a metric indicating how much profit is expected one year after the advertising and promotional expense is invested, is therefore important.」
The company indicated that expected one-year ROI, which takes product profit margins and repeat-purchase rates into account, should be prioritized as a metric for evaluating advertising investment efficiency, rather than relying solely on ROAS. - FY2021-Q2RestatedAnnual report
「We place approximately 5,000 advertisements at any given time and calculate and manage CPO daily after subdividing them into various categories, including advertising medium, ad copy, keywords, time of day, day of the week, and age group.」
The company reconfirmed its advertising-profitability management system, under which approximately 5,000 advertisements are continuously segmented by medium, copy, keywords, time of day, day of the week and age group, with CPO managed daily. Cost of sales, advertising and promotional expenses, and indirect costs are aggregated using ABC and also managed using a five-level profit structure for each product. - FY2021-Q1First statedAnnual report
「To achieve profitable and efficient advertising investment, the company calculates the relationship between CPO (Note 1), the advertising and promotional expense required per order, and LTV (Note 2), the projected future revenue generated by a customer. It then sets a cap CPO as the maximum advertising and promotional expense that may be used per order.」
The company described its method of managing the profitability of advertising investment by setting a cap CPO for each product based on the relationship between CPO and LTV. It also explained a system for aggregating indirect costs using ABC and managing each product using its own five-level profit structure.