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How it works

Business Context and Your Economics

How your margins, targets, seasonality, and customer economics are woven into every audit recommendation.

Your business isn’t generic, so your audit shouldn’t be either. A Catalyst Audit℠ reads your actual margins, order values, seasonal patterns, and customer economics before writing a single recommendation. Every finding is tested against what “profitable” means for your business — not an industry average.

The Short Version

  • Your average order value and gross margin define your break-even point. Catalyst uses these to classify every campaign as profitable, marginal, or unprofitable.
  • Product cost data (COGS) adds precision. The more cost data you provide, the sharper the profitability picture becomes.
  • Seasonal patterns and promotional calendars are factored in, so a November spending spike doesn’t trigger a false alarm.
  • Customer lifetime value (CLV) adjusts acquisition targets when your customers return to buy again.
  • Different campaigns can have different profitability targets. Brand search and non-brand search don’t play by the same rules.

How Your Economics Shape Every Recommendation

Trellis requires your financial fundamentals before running an audit: average order value (AOV), gross margin, target cost per acquisition (CPA), and target return on ad spend (ROAS). These are the lens through which every audit recommendation is evaluated.

Here’s the math behind it. If your AOV is $50 and your gross margin is 65%, your break-even CPA is $32.50. That means any campaign spending more than $32.50 per conversion is losing money on a per-order basis. Your target CPA — say $25 — builds in headroom for overhead and profit.

Catalyst tests every recommendation against these thresholds. A campaign with a $20 CPA is performing well. A campaign at $40 CPA is bleeding margin. The audit tells you which is which, and what to do about each.

Without accurate business metrics, the audit won’t run. This is by design. Generic advice based on assumed margins is worse than no advice at all.

Three Tiers of Margin Precision

Catalyst supports three levels of product cost awareness, each more precise than the last:

TierWhat You ProvideWhat Catalyst Knows
BlendedOne margin percentage for all productsWhether campaigns are profitable on average
CategoryMargin per product category (e.g., accessories at 70%, furniture at 40%)Which product categories drive real profit vs. which dilute it
SKU-Level COGSActual cost per product from your ERP or supplier dataExactly which products and campaigns generate margin, down to the SKU

The more cost data you provide, the sharper the picture. At SKU-level precision, Catalyst can identify that a campaign generating $5,000 in revenue is actually unprofitable because it’s primarily selling low-margin items — something that revenue-only analysis would miss entirely.

Seasonal and Promotional Awareness

Ad performance fluctuates with your business calendar. Black Friday margins look different from a quiet February. Catalyst factors in two types of cyclical patterns:

Seasonal patterns describe recurring periods where spending, conversion rates, or order values shift predictably. If you configure a Q4 holiday season with a +40% spend adjustment, the audit knows that higher December spending is expected behavior, not a red flag.

Promotional periods are specific events with defined start and end dates and margin impact. If you’re running a 20%-off sale for a week, Catalyst knows your margins are temporarily compressed and adjusts its profitability assessment accordingly. A CPA that looks marginal during a promotion may be perfectly healthy at normal margins.

Without this context, an audit might recommend cutting spend during your most important selling season — or fail to flag genuine overspending because it doesn’t know the promotion ended.

Customer Lifetime Value

Not every customer is a one-time buyer. If your repeat purchase rate is 35% and customers order an average of 2.5 times, the value of acquiring a new customer is much higher than a single order suggests.

When you enable CLV-adjusted targets, Catalyst recalculates your acceptable acquisition cost to account for future purchases. A $35 CPA might look unprofitable against a single-order break-even of $32.50, but it’s a strong investment when that customer is likely to place two more orders over the next year.

CLV adjustment is optional and off by default. It requires real order history data (repeat rate, order frequency, average time between purchases) computed from your store’s transaction records.

Per-Campaign Targets

A branded search campaign and a prospecting campaign serve different purposes and have different economics. Catalyst supports per-campaign profitability targets so each campaign is evaluated against the right benchmark.

You can configure target CPA and ROAS at the campaign-type level. Brand search might target a $10 CPA (because brand traffic converts cheaply), while non-brand search targets $30 CPA. Shopping campaigns might use ROAS as the primary metric instead of CPA. Each campaign’s performance is judged against its own target, not a single global number.

This prevents the common trap where a blended CPA looks healthy but hides an underperforming campaign that’s dragging down the whole account.

What Catalyst Doesn’t Do

Catalyst reads the business context you provide. It does not independently verify that your margins are accurate, your AOV reflects current pricing, or your seasonal patterns match reality. The audit is only as sharp as the economics you give it — keeping your business profile current ensures recommendations reflect your actual state.

What’s Next