Full Name
Cost per Acquisition
Acronym
CPA
What does it mean?
The amount paid to acquire a sale or a customer. Calculated as the cost divided by the number of sales.
What should you aim for?
Your CPA should be less than the profit you generate from having that customer, over the lifetime that that customer remains with you. For example, lets say you sell the customer 10 tomatoes for £10. If it costs you £5 to buy the tomatoes, pack them, send them out, then you can afford to pay up to £5 (what’s left) to acquire that customer. A customer acquired for £5 will of course mean that you break even on the transaction.
