Cost Per Acquisition
Definition
Cost Per Acquisition: Cost per acquisition measures the total cost to acquire one paying customer or complete a specific action like a signup or purchase. Unlike CPC which measures ad clicks, CPA captures the full funnel cost including clicks that didn't convert. CPA is a more meaningful metric for evaluating marketing efficiency because it ties spend directly to business outcomes.
Example Usage
“Our CPA for paid social is $85 per trial signup, but only $45 through content marketing, so we're shifting budget to content.”
Common Misconceptions
Related Terms
Customer Acquisition Cost
Customer Acquisition Cost (CAC) is the total cost of acquiring a new customer, including marketing, sales, and onboarding expenses. CAC is calculated...
Cost Per Click
Cost per click is the amount an advertiser pays each time someone clicks on their digital advertisement. CPC varies widely by industry, keyword compet...
LTV to CAC Ratio
The LTV to CAC ratio compares customer lifetime value to the cost of acquiring that customer. A ratio of 3:1 or higher is generally considered healthy...
Conversion Rate
Conversion rate is the percentage of users who complete a desired action, such as signing up, starting a trial, or making a purchase. It's calculated...
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