Enter the total cost spent on advertising and the total number of acquisitions into the calculator to determine the cost per acquisition.
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Cost Per Acquisition Formula
The following equation is used to calculate the Cost Per Acquisition.
CPA = TCM / TA
- Where CPA is the cost per acquisition ($/acquisition)
- TCM is the total marketing cost ($)
- TA is the total number of acquisitions
To calculate the cost per acquisition, simply divide the total marketing cost by the number of acquisitions.
What is a Cost Per Acquisition?
Cost Per Acquisition, or CPA, is a marketing metric that measures the total cost of acquiring a paying customer through a conversion.
In terms of online marketing, Cost Per Acquisition is a metric that measures the total cost of acquisition for a single customer. It is used in calculating metrics like Customer Lifetime Value (LTV), ROI, and more.
For example, if you pay $100 per click on Facebook ads and spend $1,000 on advertisements before getting just one sale, your CPA is $10,000. It took 100 clicks to get just one conversion, in this case, meaning it was tough to convert people browsing your site into customers.
A good CPA will vary depending on the business and industry you are in, but it’s generally thought to be lower than your average customer value. In other words, you should be willing to pay more upfront to acquire a customer if they will more than make up for it in value over time.