[Live Demo] How to Determine an Membership/eComm Biz’s nCAC
Mar 28, 2025
auto_awesome
In this engaging session, John Moran, a strategist at Tier 11 specializing in digital marketing and financial growth, reveals actionable strategies for scaling businesses. He breaks down crucial metrics like Net Allowable CAC and customer lifetime value while emphasizing the importance of data accuracy. The discussion dives into optimizing membership-first funnels and smart ad spending to avoid scaling pitfalls. Listeners learn how to enhance customer acquisition and retention, making informed decisions for sustainable growth across eCommerce and membership models.
Understanding and calculating Net Allowable CAC is vital for optimizing marketing strategies and balancing customer acquisition costs with long-term value.
Leveraging a hybrid business model that combines e-commerce with membership can significantly enhance customer lifetime value and retention efforts.
Deep dives
AppSumo's Impact on Entrepreneurial Costs
AppSumo has become a significant resource for entrepreneurs by offering exclusive discounts on software, enabling business growth without excessive costs. Since its inception in 2010, it has saved users over half a billion dollars, bolstering startups and small businesses. Major technology platforms that first emerged on AppSumo include MailChimp and Zapier, demonstrating the platform's role in facilitating innovative business solutions. The rotating array of tools available allows entrepreneurs to access essential resources at a fraction of the price, enhancing their ability to thrive.
Success Stories Through Data Analysis
The podcast highlights a case study of a lifestyle brand that achieved a remarkable 49.8% revenue increase year-over-year, illustrating the power of data in driving business growth. By utilizing the Tier 11 Data Suite, this company effectively reduced unattributed traffic by 90%, unveiling $850,000 in hidden revenue while significantly increasing their advertising budget. The success is attributed to clean, accurate data and understanding customer behavior in a privacy-conscious market. Such data-driven strategies can lead to substantial growth and profitability for businesses in competitive industries.
Understanding NCAC in Customer Acquisition
The concept of New Cost to Acquire a Customer (NCAC) is crucial for businesses aiming to optimize their marketing strategies and customer acquisition process. The podcast delves into how calculating NCAC helps businesses assess their willingness to spend on new customer acquisition, balancing costs against long-term value. Identifying this metric requires understanding various financial components such as customer lifetime value (LTV), cost of goods sold (COGS), and operating expenses. Utilizing tools like NCAC calculators, businesses can make informed decisions on scaling their marketing efforts sustainably.
Integrating E-commerce and Membership Models
A multifaceted business model that combines e-commerce and membership has shown great potential in enhancing customer lifetime value. The discussed business leverages its community to enrich the e-commerce side, providing advantages for both aspects of its operations. This integration allows for direct insights into customer behavior, ultimately leading to improved customer retention and support. Addressing churn and optimizing the synergy between subscriptions and product sales represent central challenges that require focused strategies to ensure ongoing financial sustainability.
In this special live workshop edition of the podcast, the team at Tier 11 dives into a behind-the-scenes strategy session with a real brand, tackling the financial backbone of scalable growth. From calculating Net Allowable CAC (NAC) to mapping out customer LTV and building membership-first funnels, this episode is packed with actionable insights. Discover how to avoid costly scaling mistakes, implement profit-first media strategies, and make smarter decisions with the right data. Whether you're driving eCommerce, subscriptions, or both, this is a raw, real-time breakdown of what it actually takes to grow profitably at scale.
Chapters:
00:00:00 – Welcome to Perpetual Traffic: Let’s Get Into It
00:00:17 – Business Models, Boundaries & What We’re Not Sharing
00:02:40 – NAC Unpacked: The Metric That Changes Everything
00:05:08 – Meet the Team Behind the Strategy (and the Brand in Focus)
00:06:12 – Dollars in, Dollars Out: The Ad Spend That Drives Growth
00:08:44 – LTV vs CAC: The Truth Behind Customer Profitability
00:11:23 – Drawing the Line: Setting Smart, Scalable NAC Targets
00:14:49 – What It Really Takes to Scale Without Burning Cash
00:18:53 – Membership vs E-comm: Mapping the Buyer Journey
00:19:23 – Ads That Stick: How to Push LTV Higher From Day One
00:21:06 – Target Smarter: Tools That Take the Guesswork Out
00:22:48 – Why Subscribers Are the Real Growth Engine
00:23:40 – Power Moves: CAPI & Data Suite in the Acquisition Stack
00:26:07 – Looking Back to Move Forward: What the Data Tells Us
00:30:51 – Hit the Number, Kill the Churn: The NAC Target Playbook
00:35:01 – Wrapping It Up: Takeaways, Clarity, and What’s Next
Connect with Lauren on Instagram and Connect with Ralph on LinkedIn
Thanks so much for joining us this week. Want to subscribe to Perpetual Traffic? Have some feedback you’d like to share? Connect with us on iTunes and leave us a review!