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Total Marketing & Sales Expenses ÷ #Customers Acquired It’s a critical subset of your AOV, but instead of looking at everything, it zeroes in on what new customers are spending on their first order.
As a senior marketing professional, monitoring your nAOV gives you a clearer picture of how efficient your marketing is when it comes to growing your customer base.
Without it, you might miss inefficiencies in converting new buyers or boosting their initial spend.
Typically, new customers spend less than repeat customers.
Distinguishing AOV from nAOV matters because a lower overall AOV could actually signal that you’re bringing in more new customers.
Keeping tabs on nAOV ensures your acquisition efforts are dialed in, your targeting is spot on, and you’re setting up new customers to get more from day one.
The calculation is simple:
Take all the revenue from new customer sales and divide it by the number of orders they placed.
Done right, nAOV gives you a direct line of sight into how well your business is converting and monetizing fresh leads, which is critical for long-term growth.
There are 2 components in the nAOV formula: new-customer revenue and new-customer orders.
This metric must be sourced from the business’s backend systems, and not from platform metrics.
Ensure accurate tracking by counting only first-time transactions within a specified time period.
This is the total count of individual transactions made by new customers during the measurement period.
Each order counts as a single purchase event from a first-time customer, regardless of the number of items in the transaction.
It doesn’t just give you a snapshot of a customer’s purchase value today.
It predicts how much they’re likely to bring in over their entire relationship with your business.
As a senior marketing professional, keeping tabs on your LTV doesn’t just tell you how well you’re doing at retaining customers and driving repeat purchases…
It also tells you how much your business can afford to spend on acquiring new customers.
Without it, you’ll likely miss out on scaling opportunities and early detection of holes in your retention strategies.
Focusing on LTV is the fun part of your marketing job.
Putting in the effort to make sure your customers are getting the full transformation out of their purchase can double your business revenue with hardly any money out of your marketing budget.
A high LTV means you’re getting the most out of each customer. And that’s where real growth happens.
At Tier 11, we took one of our health niche clients from $30,000/month revenue to well over $2,000,000/month.
The biggest factor in their growth was a tiny remarketing campaign targeting previous customers.
Over the course of a year, their LTV doubled.
And that campaign cost less than 1% of their advertising budget.
That’s the power of LTV.
The average revenue you pull in per order. A higher AOV means more revenue per transaction, which drives up LTV.
How often customers buy from you. The more frequently they make a purchase, the higher the LTV.
How long a customer sticks around and keeps buying. The longer they stay, the more valuable they become.
Your GP shows the total revenue your company is really making after you subtract production expenses, also known as the cost of goods sold (COGS).
Too many marketers make the mistake of focusing on gross revenue without factoring in COGS.
This focus on gross revenue alone can lead to unsustainable shrinking margins.
Understanding Gross Profit is vital for senior marketing professionals, like CMOs and VPs of Marketing, to balance profitability with growth.
Knowing your GP is key to building solid pricing strategies, and it’s a massive indicator of how efficiently your production and sales processes are running.
This is the total income you pull in from sales during the period you’re measuring. Getting an accurate read on total revenue is how you assess your company’s overall performance. If you’re not tracking this closely, you’re missing the foundation of your financial strategy.
COGS is everything that goes into making your product or delivering your service. This includes raw materials, labor costs directly tied to production, and any other costs directly related to creating the product or service. Reducing COGS while maintaining product quality can increase Gross Profit.
The two types of profit margins we’ll look at are Gross Profit (GP) and Profit Margin.
Profit Margin shows you what percentage of each dollar the business has left after all the expenses are paid.
And we’re talking about all expenses here, not just what it takes to make the product—it’s everything that eats into your cash flow.
A lot of people make the rookie mistake of obsessing over growing gross revenue while ignoring operational costs.
A large gross revenue sounds impressive, but it’s not what your business earns—it’s what it keeps that matters.
If your company is only focused on scaling gross revenue, you could find yourself with shrinking margins, where the growth you think you have isn’t real...
You’re just doing more work and spending more money, only to end up with the same profit margin as a smaller, simpler company.
Profit Margin is non-negotiable if you’re a CMO or VP.
No matter how you spin your marketing performance numbers to look good, if the company isn’t making money, your marketing is just speeding up its downfall.
If your profit margin is too thin, then it’s time to make some changes—it could mean cutting operational costs, rethinking your pricing, increasing volume, or finding inefficiencies.
You don’t want your marketing budget to be the only line item on the cutting block, so being a big-picture thinker can save your department.
A strong profit margin, on the other hand, lets you spend more to acquire new customers. Bigger marketing budgets that effectively scale the business make your job as a marketing leader fun and fulfilling again.
Showing an understanding of your company’s Profit Margins gives your voice weight in the C-suite. It breaks down barriers so you can pursue opportunities to help your company scale profitably.
Gross Profit is what’s left of your revenue after you take out the Cost of Goods Sold (COGS).
Think of it as the raw earnings from your core activities, before you deal with all the other stuff that comes with running a business.
Total Revenue is everything that comes in from sales. If you’re not tracking this down to the last dollar, your profit margin is a guess at best.
You need real numbers to make real data-driven decisions.
Let’s look at the differences.
CAC is the total cost to acquire a customer, factoring in all expenses and touchpoints:
CAC is the big picture telling us if marketing initiatives are helping with business goals or just burning cash.
CPA, on the other hand, is limited to in-platform data.
Its name, cost-per-acquisition, sounds like it should be all-encompassing.
But since it’s built into every ad platform out there, and they all have severely limited visibility on overall costs, the term CPA has been rebranded by the platforms.
It has become synonymous with a limited, in-app view of acquisition costs.
It’s the total amount spent in an ad platform or campaign compared to customer acquisitions attributed to that platform/campaign.
It only tells you what Google or Meta says about their campaigns.
Attribution bias should be coming to mind here — every platform wants to look good and entice marketers to invest more of their advertising money.
Bottom line?
Because it’s so limited in scope, in-app CPA shouldn’t be used for big-picture analysis.
For that, you’ll need CAC.
Despite its limitations, we recommend you keep CPA in your marketing toolbox.
It’s useful for establishing benchmarks and comparing performance within a platform.
This is sometimes referred to as directionality or incrementality.
While CAC and CPA are different, they will likely trend in the same direction.
If your Meta CPA goes up, your CAC is going to go up too— unless Meta’s CPA increases were offset by a cost reduction elsewhere.
If you are tracking your optimizations properly, you should be able to reduce the CPA both at the cold and warm stages of the customer journey.
CPA is what Google or Meta tells you about how efficiently your ads are converting users into customers on that platform.
It’s useful when you want to compare campaign performance against other campaigns, or across time periods.
CPA tells you how much you’re spending to acquire a customer within a single platform, but it doesn’t factor in other costs like content creation, brand awareness on other platforms, and the multiple touchpoints along the customer journey.
Your CPA may look efficient, but when you add up all the other costs outside the platform, your true cost for obtaining a customer could be much higher.
Scaling a campaign with a good CPA could be losing money if other expenses aren’t considered.
On the other hand, a campaign with a high CPA may be what’s driving sales in another platform. Turning it off could stifle growth and overall company profitability.
While general CPA gives you insight into campaign performance, nCPA zeroes in on new customers, which makes it a must-have metric when you’re focused on growing your customer base.
But just like CPA is not the same as CAC, nCPA is not the same as nCAC (new Customer Acquisition Cost).
Remember CAC takes into account the costs from all channels, across the entire customer journey.
nCPA is looking only at the costs within a specific platform like Google or Meta Ads. This makes nCPA a mini-version of nCAC. It’s helpful, but only one piece of the larger puzzle.
This is what you’re spending in-platform to get those new customers, whether it’s on Google Search ads or Meta prospecting campaigns.
This number is what you’re spending on all your campaigns other than the campaigns shown to previous buyers.
It’s important to remember this doesn’t include all the other stuff, like content creation or ad spend on other platforms.
That’s why it’s narrower than nCAC.
We’re talking about first-time buyers here, not return customers. Just the newbies.
Accurate tracking of new customers is crucial, and even though this is an in-platform metric, you’ll likely need more advanced attribution tools to distinguish the new customers from repeat buyers.
CPC is especially important for marketing leaders because it helps them assess their pay-per-click (PPC) campaigns and fine-tune strategies to avoid wasting ad spend.
CPC helps marketing leaders manage advertising budgets efficiently to get the most bang for their buck.
CPC is made up of two main components:
This refers to all the costs associated with running a digital ad campaign (ad delivery and bidding for clicks, over a specific period).
This is the total number of times users have clicked on your ad during the campaign. Accurately tracking these clicks is critical to calculating CPC and understanding user engagement.
Not all clicks are created equal. It’s important to understand which types of clicks you’re measuring.
For instance, in Google Ads, CPC is tied to link clicks that take users directly to a URL.
On Meta Ads, though, things get a bit more nuanced. There are:
When Meta reports CPC (All Clicks), it includes every type of click. If you want to track traffic driven to your site, set your dashboard to show CPC (Link Clicks).
On Google Ads, it’s more straightforward. Google CPC is primarily focused on link clicks.
So, when you compare platforms, make sure you’re comparing apples to apples, not link clicks to engagement clicks.
It still has uses, but the old-school methods of ROAS analysis are outdated.
Keep in mind ROAS is an “in-app” measurement. If your marketing team or agency is focused on showing off screenshots of ROAS metrics while your bottom line is stagnant, you may want to send them this MPI checklist to get up to date.
Making data-driven decisions is only helpful when it’s based on data that is actually reflective of a business’s health.
Although ROAS was once the default for measuring profitability, it can be misleading.
Misleading data can be disastrous for your company.
Why?
Because it doesn’t tell you the whole story. ROAS might look great in-platform, but if overall growth and new customer acquisition are stagnant, you could be scaling spend that isn’t helping the bottom line.
On the other hand, ROAS could look terrible. But turning off that low-ROAS campaign could be an essential element in your customers’ journey that drives growth down the line.
ROAS is composed of two key components that provide a snapshot of how much revenue your campaigns are generating compared to how much you are spending:
The money you make directly from ads on that platform.
The amount of money you’ve invested in your advertising campaigns during a set period.
Let’s say you’re running ads on Google and Meta. Google shows you a 5.0 ROAS, while Meta comes in at 3.5. So, it’s time to shift more budget to Google, right?
Not necessarily.
That high Google ROAS might just mean it’s picking up low-hanging fruit—people who already know your brand from other efforts like Meta’s top-of-funnel campaigns.
If your marketing team is chasing ROAS, they could cut the very channels that are fueling growth. Meta might not be generating the last-click conversions, but it could be playing a critical role in priming people to search for you on Google later.
nV is a valuable metric for assessing the effectiveness of paid traffic, content strategies, and acquisition efforts.
This refers to first-time users visiting the website within a specified time frame. You can identify a visitor as a first-timer by using cookies, IP addresses, or browser settings.
The timeframe of what constitutes a “new” visit varies but often defaults to 30 days. Determining this time frame for your unique business is where your expertise is critical. It's up to you to align your data strategy with your business goals. Here's how:
The timeframe you choose to classify visitors as “new” should align with business objectives and the customer journey.
In markets where customers make quick purchase decisions, a 30-day window for new visitors might make sense.
Maybe your sales cycle is even shorter, say less than a week. You may want to adjust the time frame accordingly.
For businesses with long sales cycles like B2B or high ticket offers, visitors could still be considered “new” after 60-90 days.
Sometimes you'll want extra time to show how top-of-funnel actions impact the customer journey over a long consideration period.
Most systems default to a 30-day window, but now you know to investigate whether a shorter or longer time frame would provide more insights into your buyers’ journeys.
The key is to customize your analysis to reflect how your target audience engages with your website. Make sure you're getting accurate data that aligns with your acquisition strategy.
Make sure to look at all available data. You can get insights into the customer journey by comparing first click conversion reports to last click conversions. Different product categories within a business could have different timelines.
Tracking unique returning visitors offers insights into website “stickiness” and engagement. By looking at both new and returning visitors you can see the impact of retention strategies.
You need your rV metric to make informed decisions for building repeat engagement and customer loyalty.
Unique Returning Visitors
These visitors visited the website once and then visit again within the defined period.
Reliance on Cookies Alone
We all know by now that cookies aren’t what they used to be. Between privacy settings, device switches, and users deleting cookies, all you’re left with are a few crumbs. Not the reliable data you need for dialing in your strategy.
You can use tools like Wicked Reports to get a more unified view by linking sessions and interactions from different devices, channels, and touchpoints. This way, you can track actual behavior instead of just one-off sessions.
Of course, capturing their email or a personal log-in gives you the most detail of their customer journey.
But here’s the key:
We’re only talking about first-time visitors.
Forget about repeat traffic for a second. We’re getting deeper than just Cost per Click (CPC) or Cost per Landing Page Views. This is all about new eyeballs on your brand.
Because if you want to scale, first-time visitors are your growth engine.
They’re the new leads, the future customers. If you’re not tracking how much you’re spending to get them, you’re missing the mark.
For CMOs and Marketing VPs, eCPNV gives you a direct line of sight into how effectively your marketing dollars are turning into new traffic.
But here’s the problem:
You can’t calculate this metric in Google Analytics.
Why? Because of how GA4 defines a “new” visitor.
GA4’s user-level data retention settings will save information about a visitor for 2 months by default.
Only 2 months!
If users take a break for 2 months or more, and then return to the website, GA will consider them a new user.
For brands with thousands or millions of monthly visitors, this can lead to significant over-reporting of new users, and therefore in costs to generate those “new” users and/or revenue attributed to those “new” users.
You’ll need platforms like Wicked Reports to track true first-time visitors and see how efficiently your spend translates into new traffic.
This includes all costs associated with digital marketing campaigns aimed at driving traffic to your website.
It can encompass things like…
Remember we are zeroing in on first-time visitors here. New visits refer to first-time visits from unique users during a specified time frame.
That’s what sets eCPNV apart: it gives you clarity on the new users you’re bringing in.
To really nail this number, you need a modern attribution platform that goes beyond primitive cookie-based metrics.
GA4 is too limited for accurate eCPNV data. You can see how this FunnelVision dashboard in Wicked Reports lays out a company’s eCPNV across all marketing channels.
