New Customer Acquisition Cost Analysis for eCommerce Brands

You're probably tracking a dozen different metrics, watching your ROAS like a hawk, and optimizing the hell out of your ad spend. 

But have you really stopped to think about what it costs you to get one new customer through the door?

Not just any customer who happens to buy from your ads, but specifically a new customer. 

Because let's face it - if you're running paid ads to sell to people who already know and love your brand, you're basically setting money on fire.

Think about it: your existing customers should be hanging out in your email and SMS lists, not needing a fancy paid ad to remind them you exist. 

So when we talk about NCAC, we're getting real about the actual cost of growing your customer base.

What is NCAC and Where to Find It

Calculating your New Customer Acquisition Cost isn't rocket science. 

It's literally how much cash you're burning to get one new person to buy your stuff. Simple, right?

But here's where it gets interesting - you can't just pull this number out of thin air (or from a single platform). You're going to need to combine data from a few different sources:

The new customer breakdown you would get from a channel like Shopify, combined with ad spend data from something like QuickBooks Online. 

Think of your marketing channels like two separate games:

1. The acquisition game (paid ads) - where you're hunting for fresh meat
2. The retention game (email, SMS) - where you're keeping your existing customers happy

NCAC is all about that first game. 

Because let's be real - if you're using expensive paid ads to sell to people already on your email list, you're doing it wrong. 

Those Facebook and Instagram ads? They should be working to bring new faces into your brand's universe.

NCAC vs regular ROAS

While ROAS tells you how much money you're making back on your ad spend (which, sure, is important), NCAC zeroes in on something more specific - how much you're paying to add one more customer to your roster. 

And depending on your business model, this might actually be the more important number to watch.

When Should You Care About Ncac?

This metric becomes important if you're running a brand that:

• Has customers who stick around forever
• Sells products people need to rebuy regularly
• Makes bank on the lifetime value (LTV) of each customer

Here's the mind-shift you need to make: that first purchase value? It might not matter as much as you think. Yeah, I said it.

For brands with a very high LTV or who are able to maintain a relationship with a customer for a long time and get a lot of value out of them, the value of the first purchase is not necessarily that relevant. 

They just want to be able to acquire a customer.

The Sample Strategy: When Low ROAS Isn't Actually Bad

Now here's where things get spicy - let's talk about sampling strategies. 

You know those brands that practically give away their first product? There's a method to their madness.

Imagine you're selling a $2 sample of your amazing product. Your ROAS is going to look terrible on paper. Like, your CFO might have a heart attack kind of terrible. 

But here's the thing: your NCAC could actually be fantastic.

Think about it:

• You might be acquiring customers for cheap
• Your entry barrier is super low
• You're getting real people to try your product

But (and this is a big but) - you need to be damn sure about two things:

1. These sample customers actually stick around
2. They eventually convert into full-price buyers

If the sample customer is not one that they can retain and it's a low value customer, then that's something to keep in mind.

What is a Good NCAC?

There's no magical NCAC number that works for every brand. 

What's a good benchmark for a luxury skincare brand might be catastrophic for a fast-fashion store. So how do you know if your numbers make sense?

Here's how to think about it:

Watch the Trends

First up, look at whether your NCAC is trending up or down over time. Are you spending more or less to acquire each new customer? 

This trend line tells you a story about your brand's efficiency in finding new customers.

First-Order Profitability

In an ideal world, you want to be profitable on that first order. 

Yeah, even with those sample strategies we talked about. But let's be real - sometimes that's not possible, and that's okay if you know your customer lifetime value can support it.

Different Strokes for Different Folks

If you're running different acquisition strategies (like mixing full-price products with sample offers), your ROAS might be all over the place. 

But your NCAC? That number stays real:

In instances where a brand is testing out a lot of different offers on that first customer acquisition strategy... it might be more helpful to just focus on NCPA or NCAC instead of ROAS, whereas NCAC is still going to stay the same, just based on the fact that that's how much they had to spend to acquire a customer.

The Bottom Line

At the end of the day, NCAC isn't just another fancy acronym to throw around in meetings. 

It's a reality check on how much you're investing in growing your customer base. 

Whether you're running a sampling strategy or selling premium products right out the gate, knowing your NCAC helps you make smarter decisions about where to put your marketing dollars.

Remember: the goal isn't always to have the lowest NCAC possible - it's to have an NCAC that makes sense for your business model and supports sustainable growth. 

Sometimes that means spending more upfront for customers who'll stick around for years. Other times it means keeping acquisition costs low to support thinner margins.

The key? Know your numbers, understand what they mean for your specific brand, and keep testing and optimizing. Because in the end, the only wrong move is flying blind.