The maximum you can afford to pay for a customer isn’t set by their first order — it’s set by every order they’ll ever place. A store where buyers come back three times can outbid a store where they buy once and vanish, even selling the identical product at the identical price, because the second […]
Category Archives: Rising Customer Acquisition Costs
Your break-even acquisition cost is the most you can pay to land a new customer without losing money on that customer. At its simplest, it’s the contribution margin of a first order: average order value, minus cost of goods, minus payment fees, minus shipping and fulfilment, minus any discount. Whatever’s left is the ceiling — […]
The payback period of a new customer is how long it takes for the profit they generate to cover what you paid to acquire them. The real version of that number — the one worth running your business on — uses gross margin after every cost, not revenue, and it uses your actual repeat behavior, […]
If you want a new customer to pay back what you spent to acquire them sooner, you build the journey backward from the payback date, not forward from the sale. Decide how many days you can afford to wait to break even, then design the first purchase and the weeks after it to hit that […]
If ad costs are climbing and your margins are getting thin, the survival plan is not “find cheaper traffic.” It’s to make each customer worth more so you can afford the traffic you already buy. That happens in four moves, in order: know your real numbers, stop the margin leaks, get more from every visitor […]