What is Blended CAC? 

Definition: CAC stands for "Customer Acquisition Cost". This is the marketing cost needed to acquire a new customer. It’s blended because it includes all your connected marketing channels. It’s represented in dollars. Here, we’re looking at the Blended CAC for a selected cohort. 

Formula: Blended CAC = Total ad spend in M0 of the selected cohort (Connected ad channels) / # of new customers acquired in M0 of the selected cohort (Shopify) 

Data Source: Connected ad channels (i.e. Facebook, Google Ads, etc), Shopify 

Example: You’re still running Wheel & Sprocket.

Let’s say you’re interested in looking at the customers you acquired in July 2021 (M0). During that month, you acquired 1,500 new customers. You spent $205,000 across Facebook, Google Ads, and Snapchat. So, your Blended CAC = $550,000 / 1,500 = $136.67

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What is Blended ROAS? 

Definition: This multiple tells you how much sales you make for every dollar you spend. Here, we look at Blended ROAS for M0. 

Formula: Blended ROAS = Total sales made by the customers in the selected cohort for M0 (Shopify) / Total ad spend in M0 for this cohort (Connected Ad Channels) 

Data Source: Shopify, Connected Ad Channels (i.e. Facebook, Google Ads, etc)

Example: Imagine we’re looking at the same July 2021 cohort (M0) for your online bicycle store.

The customers you acquired that month spent $250,000 at your store. If you look at your total ad spend for that month, you spent $205,000 across Facebook, Google Ads, and Snapchat. So, your Blended ROAS for July 2021 (M0) is $250,000 / $205,000 = 1.22x. 

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What is Blended ROAS to date? 

Definition: This multiple tells you how much sales you make for every dollar you spend. Here, we look at Blended ROAS over time—not just based on how much a customer spends on their first purchase but considering all the sales they make over time. 

Formula: Blended ROAS = Total sales made to date by the customers in the M0 cohort (Shopify) / Total ad spend made to date for the M0 cohort (Connected Ad Channels) 

Data Source: Shopify, Connected Ad Channels (i.e. Facebook, Google Ads, etc)

Example: Imagine we’re looking at the same July 2021 cohort for your online bicycle store at the end of the quarter so through November 2021. The customers you acquired that month (M0) have spent $495,500 at your store to date. In terms of your ad spend, you spent $205,000 on paid ads in July 2021 (M0). So, your Blended ROAS to date = $495,500 / $205,000 = 2.42x. 

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What are Cohorts?

Definition: We can think of a cohort as a collection of customers grouped together based on specific criteria. The most common way to group customers (and at Tydo) is based on a specific time period. It’s typically the first month that a customer was acquired/made a purchase. But, you can layer on tags that touch on other criteria (i.e. the product a group of customers purchased) to make it an even more specific cohort. 

Data Source: Shopify

Example: Remember how 1,500 people purchased an item from Wheel & Sprocket for the first time in July 2021?

Those 1,500 customers are the people who make up your July 2021 cohort.

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What are New Customers? 

Definition: In Tydo’s Cohort block, this refers to the number of first-time customers in a given month. That group of customers makes up a cohort. 

Formula: New customers = the number of first-time customers who make a purchase from your store in a given month (Shopify) 

Data Source: Shopify

‍Example: Let’s imagine that Mary made her first purchase (a new bike) from Wheel & Sprocket in July 2021.

In August 2021, she purchased a new bike lock from your store (yay, a repeat customer!). If you’re looking at cohorts based on the month a customer was acquired, Mary only belongs to the July 2021 cohort. She is a returning customer in August 2021. 

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What are Orders per Customer? 

Definition: This is the average number of orders placed to date by customers in a given cohort. 

Formula: Orders per customer = The number of orders placed to date by customers in a given cohort (Shopify) / the number of customers in a given cohort (Shopify) 

Important Note: The denominator is found by looking at M0. 

Data Source: Shopify

Example: In July 2021, you had 1,500 first-time, Wheel & Sprocket customers.

Since July 2021 (remember: we’re looking at this cohort from the beginning of December 2021), that cohort has placed 2,865 orders from your store. So, the Orders per Customer = 2,865 / 1,500 = 1.91. 

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What are Returning Customers? 

Definition: Here, we define Returning Customers as the number of customers from the selected cohort who have repurchased from your store in a chosen subsequent month. 

Formula: Returning Customers = the number of customers in the highlighted cohort who repurchased from your store in a selected month (Shopify) 

Data Source: Shopify

Example: Let’s say Mary made her first purchase from Wheel & Sprocket in July 2021. She made a second purchase in October 2021.

Mary only belongs to the July 2021 cohort. In October 2021, she is a returning customer, but she is still part of the July 2021 cohort since that’s when she made her first purchase at Wheel & Sprocket. 

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What are Sales? 

Definition: Here, we define sales as the money coming into your business by a group of customers acquired in the month selected (aka a cohort). It is the value of all sales, including shipping and minus any discounts applied for a given cohort. 

Formula: Sales* = Total sales to date (Shopify) - discounts to date (Shopify) + shipping revenue to date (Shopify) 

*This is for the cohort selected. 

Data Source: Shopify

Example: Remember how you acquired 1,500 customers in July 2021? Their purchases added up to $250,000 going into your business for that month. Since then, customers have continued to purchase from your store. 

Out of those 1,500 customers, in August 2021, 175 of them made another purchase, amounting to $30,000 in sales. In Sept 2021, you had 300 returning customers, who made purchases amounting to $57,500 in sales. In Oct 2021, you had 450 returning customers, who brought in $80,000 in sales. In Nov 2021, you had 420 returning customers, who brought in $78,000 in sales. 

So, to date the sales for your July 2021 cohort when you’re looking at the end of November 2021 (M4) = $250,000 + $30,000 + $57,500 + $80,000 + $78,000 = $495,500. 

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What are Total Orders? 

Definition: We can think of this as the orders placed by a cohort (group of customers acquired in the month selected) to date. 

Formula: Total Orders = the sum of orders placed by customers acquired in {month, year} (Shopify) 

Data Source: Shopify

Example: Let’s go back to those 1,500 first-time customers you acquired in July 2021. They placed 1,505 orders from Wheel & Sprocket that month. But since, then some of these customers have continued to purchase from your online store, which is awesome! 

In November 2021 (M4), from that group of 1,500 customers, 420 of them ordered from you again. Those 400 returning customers placed 420 orders in November. 

So, to date your orders for the March 2021 cohort in M4 = 1,505 + 420 = 1,925. 

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