Email & Retention
How much should ecommerce brands spend to acquire a new customer?
The amount you can afford to spend on a new customer should come from the customer's expected contribution value, not an industry benchmark.
Start with first-order economics
Suppose:
- Product revenue: $120
- Product and variable costs: $65
- Contribution before marketing = $55
If you want $20 first-order contribution, your allowable acquisition cost is roughly $35.
Then consider repeat value
If customers reliably generate another $80 contribution over the next year, you may choose to spend more than $35 to acquire them. The important word is reliably. Do not fund aggressive acquisition using an optimistic LTV projection that has not appeared in real cohorts.
Cash flow matters
A customer worth $300 over three years is not the same as one worth $300 within 60 days. Fast payback supports much faster scaling. That topic is covered in CAC payback period for ecommerce.
Segment customer quality
Customers acquired through deep discounts may have a lower future value than full-price customers. Channel, country and first product can all affect LTV. Set acquisition targets from actual contribution, retention and cash-flow needs. "Our competitors pay $80" is not an economic model.
Build an acquisition target from your own numbers
If you want to know exactly what your business can afford to pay for a new Shopify customer, contact us. We can build the acquisition target from your numbers.