Perpetual Traffic Part 2 - The 5 Step Formula to Determine Your nCAC
Feb 4, 2025
Discover the ins and outs of New Customer Acquisition Cost (nCAC) as Ralph and Lauren highlight hidden expenses that can derail your budget. They challenge common myths and unveil a formula that transforms your understanding of customer costs. The discussion includes vital insights on how seasonality affects profits, plus an exciting tool for tracking nCAC accurately. Listeners can also participate in an interactive challenge for a chance to win a strategy session—perfect for elevating your marketing game!
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Importance of nCAC
- Determine your new customer acquisition cost (nCAC) to scale smart.
- nCAC helps you understand the actual cost of acquiring new customers versus returning ones.
Fixed Costs vs. COGS
- Fixed costs, like a distribution facility lease, don't change with sales volume.
- Ignoring these fixed costs can quickly bankrupt a business.
Contribution Margin vs. Gross Margin
- Understand the difference between contribution margin (single product profit) and gross margin (overall business profit).
- Factor in operating expenses and overheads when calculating your gross margin.