Goal

Provide best practice recommendations on how to use your New Customer metrics in Meta Ads. The beginning of this document contains a consolidated view of best practice optimizations by New Customer KPIs followed by a deeper dive into each.

Expectations

Every brand has different goals and a different account structure. The below best practices are built using the assumption that a brand’s goal in Meta is to acquire new and high value customers, not just any customer. New Customer measurement will be especially important for brands who care about improving New Customer acquisition costs specifically.

Some brands have weekly, monthly, quarterly targets to hit in Meta. This may be increasing sales volume, staying above a certain ROAS floor (e.g. don’t drop below a 2x ROAS), or acquiring customers at a certain cost per result level. It’s important to set these goals for New Customers specifically.

If Meta is your source of truth, these goals are limited to Meta’s attribution model which trains off of and reports only on short term revenue/purchase volume. This paired with Meta’s inability to effectively match a purchaser to a Shopify profile means your view is limited AND you’re inflating your prospecting KPIs with returning customers.

Consolidated Best Practices by KPI

New Customer Rate

Aim to increase New Customer Rate or shift spend to those campaigns that have the highest New Customer share.
To increase New Customer Rate, you should review your exclusions to ensure the maximum number of returning customers are not being targeted.
- Custom audiences such as broad pixel based purchasers over the last 180 days, purchaser audience lists from Shopify, and dynamic purchaser email list uploads from your email provider should be added as exclusions.

New Customer ROAS

Shift spend to those campaigns that are driving customers that are more valuable to your business.
Review exclusions to ensure as many returning customers are excluded as possible.
Review which pieces of content are attracting new and valuable customers to the business and provide this information to your creative team.
Review which influencer or branded content is attracting new and valuable customers to the business at the highest New Customer ROAS. This allows you to double down on top performing influencer relationships or walk away from underperforming ones.
Review which interest based prospecting or custom retargeting audiences are attracting new and valuable customers to the business and double down / create content tailored to these groups.
Conduct A/B tests on different ad creatives, audiences, and landing pages to find the best-performing combinations by New Customer ROAS.
Set a goal for your business to maintain a New Customer ROAS above X floor.

Cost per New Customer

Shift spend to those campaigns that are driving New Customers at the lowest cost.
Review exclusions to ensure as many returning customers are excluded as possible.
Review which pieces of content are attracting new and valuable customers to the business at the lowest cost and provide this information to your creative team.
Review which influencer or branded content is attracting new and valuable customers to the business at the lowest cost. This allows you to double down on top performing influencer relationships or walk away from underperforming ones.
Review which interest based or custom retargeting audiences are attracting new and valuable customers at the lowest cost to the business and double down / create content tailored to these groups.
Conduct A/B tests on different ad creatives, audiences, and landing pages to find the best-performing combinations by New Customer ROAS.
Set a goal for your business to maintain a Cost per New Customer below $X amount.

New Customer Metric Overview

Overview:

Most of our partners treat Meta as a New Customer acquisition tool but due to identity loss and not being able to effectively track customers, Meta is failing at giving you the correct information on purchasers leading to wasted ad spend.

Without New Customer metrics feeding into Meta directly from Shopify, you are unintentionally making ad buying decisions with the wrong information. This is critical to solve as you are likely already communicating with your returning customers through other channels such as email, sms, and other retention based activations.

Even with best practice audience exclusions in place, we are seeing that upwards of 50% of prospecting conversions are actually returning customers. This props up and subsidizes your return on ad spend (ROAS) in prospecting campaigns, thereby wasting your ad spend if your goal is to find New Customers.

Since we (1) set a brand-specific first party ID graph for our partners and (2) can see all customer history in your Shopify store through the Black Crow app, for every purchase that takes place we can identify:

If the customer is new or returning as reported from Shopify.
If the customer purchased within your campaigns’ attribution window.
Dynamically pass this information back into Meta as a custom event and tie it to the campaign/ad set/ad where that purchase took place.

There are three core New Customer metrics our partners have found most immediately impactful that are available to you through the Paid Ads Growth Pack.

New Customer Rate
New Customer ROAS
Cost per New Customer

New Customer Rate

Definition:

The percentage of your total Meta website purchases that are from New Customers as reported from Shopify.
Calculated as New Customer / (New Customer + Returning Customer)

Tactics:

Evaluate how effectively Meta is acquiring New Customers in prospecting and retargeting campaigns. Even with best practice exclusions in place, there are returning customers slipping through.

Example:

In the below example, we see that this Black Crow partner’s New Customer Rate is ~31% for their prospecting campaigns. This means that 69% of total “prospecting” purchases are actually returning customers. This is tied to (1) lack of correct exclusions, (2) Meta’s inability to effectively match users to Shopify profiles that have purchased in the past or (3) a combination of the two.

By looking at New Customer Rate, we can:

Aim to increase New Customer Rate or shift spend to those campaigns that have the highest New Customer share.
To increase New Customer Rate, you should review your exclusions to ensure the maximum number of returning customers are not being targeted.
- Custom audiences such as broad pixel based purchasers over the last 180 days, purchaser audience lists from Shopify, and dynamic purchaser email list uploads from your email provider should be added as exclusions.

New Customer ROAS

Definition:

ROAS but for New Customers only.
Calculated as Black Crow New Customer Conversion Value / Amount spent

Tactics:

For each New Customer metric, treat them the same way you would their standard KPI equivalent, i.e. New Customer ROAS is simply your ROAS for New Customers only. Increase ad spend on campaigns, ad sets and ads that are driving the highest New Customer ROAS, and pull back on campaigns, ad sets and ads that are lagging in this metric.

Example:

In the below example, we see that this Black Crow partner’s Purchase ROAS is 8.45x for their prospecting campaigns. However, this is highly subsidized by returning customers due to Meta’s inability to effectively match users to Shopify profiles that have purchased in the past. The New Customer ROAS is in reality only ~2x meaning action is required to ensure you're not wasting New Customer acquisition dollars on returning customers.

Additionally, depending on your audience exclusions, New Customer ROAS may not scale 1-to-1 with your Purchase ROAS. In this example, the top campaign does not have the highest Purchase ROAS however relative to spend it has a very strong New Customer ROAS.

By looking at New Customer ROAS, we can:

Shift spend to those campaigns that are driving customers that are more valuable to your business.
Review exclusions to ensure as many returning customers are excluded as possible.
Review which pieces of content are attracting new and valuable customers to the business and provide this information to your creative team.
Review which influencer or branded content is attracting new and valuable customers to the business at the highest New Customer ROAS. This allows you to double down on top performing influencer relationships or walk away from underperforming ones.
Review which interest based prospecting or custom retargeting audiences are attracting new and valuable customers to the business and double down / create content tailored to these groups.
Conduct A/B tests on different ad creatives, audiences, and landing pages to find the best-performing combinations by New Customer ROAS.
Set a goal for your business to maintain a New Customer ROAS above X floor.

Cost per New Customer

Definition:

Customer acquisition cost (CAC) but for New Customers only
Calculated as Amount Spent / number of New Customers

Tactics:

For some partners, CAC is more important than ROAS. If this is you, you now have a metric from Black Crow to directly measure prospecting campaign health by Cost per New Customer, not just any customer. Similar to New Customer ROAS, you can treat Cost per New Customer the same way you would the standard KPI equivalent, i.e. Cost per New Customer is simply your CAC for New Customers only. Increase ad spend on campaigns, ad sets and ads that are driving the lowest Cost per New Customer, and pull back on campaigns, ad sets and ads that are lagging in this metric.

Example:

In the below example, we see that this Black Crow partner’s Cost per purchase is ~$41 for their prospecting campaigns. However, we can see that this is highly subsidized by returning customers due to Meta’s inability to effectively match users to Shopify profiles that have purchased in the past. The Cost per New Customer is actually ~$160 which is much more representative of prospecting campaign health. Action is required to ensure you're not wasting New Customer acquisition dollars on returning customers.

By looking at Cost per New Customer, we can:

Shift spend to those campaigns that are driving New Customers at the lowest cost.
Review exclusions to ensure as many returning customers are excluded as possible.
Review which pieces of content are attracting new and valuable customers to the business at the lowest cost and provide this information to your creative team.
Review which influencer or branded content is attracting new and valuable customers to the business at the lowest cost. This allows you to double down on top performing influencer relationships or walk away from underperforming ones.
Review which interest based or custom retargeting audiences are attracting new and valuable customers at the lowest cost to the business and double down / create content tailored to these groups.
Conduct A/B tests on different ad creatives, audiences, and landing pages to find the best-performing combinations by New Customer ROAS.
Set a goal for your business to maintain a Cost per New Customer below $X amount.

Additional Metrics

Once the Black Crow New Customer metrics are added to your account, these are yours to create any number of custom metrics that are valuable to your business to track.

This can include but is not limited to:

New Customer AOV
New Customer Conversion Rate
Total New Customer Count
Total New Customer Revenue

Let’s continue the conversation. As you uncover further use cases for your New Customer metrics, Black Crow would love to hear about it!