Cost per acquisition (CPA) is a metric that is used in digital marketing to measure the cost of a specific user action.
Why is CPA important?
It helps to understand how much specific action or customer is costing the business and also indicates whether specific strategies are working.
How to lower Cost Per Acquisition?
Optimise ad copy to captivating and relevant to customers, focus on not only driving new customers but also retaining existing customers as they tend to generate better return over longer time periods, make website visually compelling, relevant and user friendly for customers, prioritise customer that are likely to convert, using customer data lists
Calculation:
CPA = cost / conversions
Example:
Boutique Stone spent £2,000 on their new tiles campaign, driving 60 sample sales, which means that is cost £33 for a client to drive a sale (£2,000/60=£33)
In Affiliates
Cost per acquisition. In affiliate marketing this refers to a % of the revenue of a sale that is paid to the publisher/affiliate.
Example: The CPA for an affiliate is set at 10%, a customer buys a dress for £70, the commission the affiliate will receive is £7.
