Perpetual Traffic How to Acquire New Customers Profitably Using The nCAC Calculator
Apr 29, 2025
Nick Miller, Head of Traffic at Tier 11 and former pro musician, dives into the revolutionary nCAC (New Cost to Acquire a Customer) calculator. He emphasizes its importance over outdated metrics like ROAS, showcasing how it can optimize ad spend and drive smarter marketing decisions. Nick also discusses customer lifetime value and the intricacies of cost management, revealing the secrets behind Tier 11's success. Get ready for insights that can transform your customer acquisition strategy and unlock growth through smarter metrics!
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nCAC surpasses ROAS relevance
- nCAC (New Cost to Acquire a Customer) is the most important metric for profitable growth in paid media.
- ROAS is less reliable due to omnichannel divergence and attribution issues.
Calculate LTV first
- Start with calculating LTV as the base to determine NCAC.
- Use historical purchase data over a 12-month period to estimate customer spending and profitability.
Distinguish COGS and OpEx
- Break down all direct costs variable with sales volume into COGS, including shipping and transaction fees.
- Separate fixed overhead costs (OpEx) which don't fluctuate with sales, like rent and payroll.