New Customer CM1 MER: First-Order Gross Margin Efficiency

New Customer CM1 MER measures how much gross margin (revenue minus COGS) you generate from first orders per dollar of ad spend.

Formula

New Customer CM1 MER = New Customer CM1 ÷ Ad Spend

Formula Components

Metric	Definition
New Customer CM1	Gross margin from first-time buyer orders
Ad Spend	Total advertising spend

Metadata
Type	Ratio
Data Source	Shopify, Advertising Platforms
Aggregation	Ratio

Example

Your Shopify store generates $30,000 CM1 from new customers and spends $15,000 on ads.

Component	Value	Calculation
New Customer CM1	$30,000	First-order gross margin
Ad Spend	$15,000	Marketing cost
New Customer CM1 MER	2.0	$30,000 ÷ $15,000

How It Works

New Customer CM1 MER shows gross margin efficiency for acquired customers. A value of 2.0 means you’re generating $2 of first-order gross margin for every $1 spent on ads. This helps evaluate if acquisition costs are sustainable at the gross margin level.

Benchmarks

Rating	Range
Excellent	> 2.5
Good	1.5 – 2.5
Moderate	1.0 – 1.5
Unprofitable	< 1.0

Break-even at CM1 level requires CM1 MER of at least 1.0.

Metric	Relationship
New Customer CM1	Numerator (gross margin)
CM1 MER	Overall CM1 efficiency
New Customer CM2 MER	After fulfillment costs

See all Performance metrics →

​Formula

​Formula Components

​Example

​How It Works

​Benchmarks

​Related Metrics

Formula

Formula Components

Example

How It Works

Benchmarks

Related Metrics