How to Build Revenue & Cost Projections?

You are the growth manager at ShopEase, an emerging e-commerce platform in India.

As Q1 2025 is coming to a close, your task is to develop a revenue growth model for the upcoming quarter, Q2 2025.

Here is the data from the previous quarters:
- Q4 2024: 2,000 customers acquired, ₹500 AOV (Average Order Value), 1.4 purchase frequency.
- Q1 2025: 2,500 customers acquired, ₹450 AOV, 1.5 purchase frequency.
The marketing budget for Q2 2025 is ₹37,50,000.
The average Customer Acquisition Cost (CAC) in previous quarters was ₹1,500.
The retention rate in previous quarters was 90%.
The average remarketing cost per existing customer was ₹150.

- Your challenge is to prepare a comprehensive revenue growth model for Q2 2025, taking into account the available data and marketing budget.
- You need to decide on the allocation of the budget between acquiring new customers and remarketing to existing customers.
- Evaluate the impact of different budget allocations on projected revenue, costs, and the LTV/CAC (Lifetime Value to Customer Acquisition Cost) ratio.
- Additionally, conduct a sensitivity analysis to explore the effects of a ±10% change in key metrics like AOV, purchase frequency, and retention rate.