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Cost per Acquisition: Strategies for Effective Marketing

Cost per acquisition (CPA) is a digital advertising metric that measures the average cost incurred to acquire a customer or generate a conversion, such as a sale or lead. Cost Per Acquisition, or “CPA,” is a marketing metric that measures the aggregate cost to acquire one paying customer on a campaign or channel level. CPA is a vital measurement of marketing success, generally distinguished from the Cost of Acquiring Customers (CAC) by its granular application. It is a financial metric used to measure the revenue impact of marketing campaigns directly. Cost per acquisition (CPA) is a pricing model used in online advertising. With CPA, brands pay for each successful acquisition generated by their ad campaigns, such as sales or form submissions.

Many marketers prefer the cost-per-acquisition pricing model because they can set their definition of an acquisition before they start advertising and only have to pay when their desired acquisition or action happens. In academia, CPA is studied within the fields of online advertising, performance marketing, and financial analysis. Researchers investigate methods for calculating CPA, including dividing advertising spend by the number of conversions attributed to specific campaigns, channels, or ad placements. CPA optimization strategies may include targeting high-value audiences, refining ad creative and messaging, and optimizing landing page experiences to increase conversion rates and reduce acquisition costs. By optimizing CPA, organizations can improve advertising ROI, allocate budgets effectively, and drive profitable customer acquisition. Academic studies on CPA also explore its relationship with other advertising metrics such as click-through rate (CTR), conversion rate, and return on ad spend (ROAS) to evaluate the effectiveness and efficiency of digital advertising investments across various marketing channels and campaign objectives.

On the contrary, customer relationship management (CRM) is a technology that manages all your company’s relationships and interactions with customers and potential customers. The goal is simple: Improve business relationships. A CRM system helps companies stay connected to customers, streamline processes, and improve profitability. CRM software helps you focus on your organization’s relationships with individual people — including customers, service users, colleagues, or suppliers — throughout your lifecycle with them, including finding new customers, winning their business, and providing support and additional services throughout the relationship. With a CRM solution, the sales and marketing team can track and follow a customer’s interaction journey with your business. This can enhance the customer journey and experience by refining each customer touchpoint.

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What is a CPA acquisition cost?

Cost per acquisition (CPA) is a marketing metric that measures the total cost of a customer completing a specific action. In other words, CPA indicates how much it costs to get a single customer down your sales funnel, from the first touch point to conversion.

Why is the cost per acquisition important?

Cost per acquisition (CPA) is a term used to describe how much it costs your online business to get your audience to take action. Knowing your CPA for each campaign can help you start with a baseline and reduce the price throughout the campaign to help you get more out of your marketing or advertising campaign.

How do you calculate cost per acquisition CPA?

The CPA calculation is calculated by dividing your total costs (marketing costs) spent by the number of new customers in the same time period.

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