What's a good CPA?
Depends on LTV. Good CPA = 1/3 of LTV or less (3:1 LTV:CPA ratio). E-commerce: $25-50, SaaS: $100-300, B2B: $200-500. Must be profitable from first purchase or have strong retention.
Calculator
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Customers acquired from this campaign
Analysis
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How to Use
Step-by-step instructions
- 1Enter total marketing spend
- 2Input number of acquisitions/customers
- 3Add average order value per customer
- 4Review CPA, revenue, and ROI
- 5Optimize: lower CPA and/or increase AOV for better ROI
CPA & ROI Formulas
CPA measures the cost to acquire one customer. Lower CPA with positive ROI indicates efficient acquisition. CPA should be less than customer LTV.
CPA = Total Spend ÷ Acquisitions
Revenue = Acquisitions × Average Order Value
ROI = ((Revenue - Spend) ÷ Spend) × 100%Variables:
CPACost Per Acquisition - spend per customerROIReturn on Investment percentageAOVAverage Order Value per customerLTVCustomer Lifetime Value (should exceed CPA)Example
E-commerce Campaign Example
Inputs:
Total Spend:$10,000
Acquisitions:100 customers
Average Order Value:$50
Steps:
- 1.CPA = $10,000 ÷ 100 = $100/customer
- 2.Revenue = 100 × $50 = $5,000
- 3.ROI = (($5,000 - $10,000) ÷ $10,000) × 100 = -50%
- 4.Result: LOSING money - need AOV >$100 or lower CPA
Result:
$100 CPA with -50% ROI - unprofitable campaign
Frequently Asked Questions
How do I reduce CPA?
Better targeting, improve ad copy, optimize landing pages, A/B test, retargeting, lookalike audiences, SEO/organic, referrals, conversion rate optimization, remove low-performing keywords/channels.
CPA vs CAC - what's the difference?
CPA = marketing spend only. CAC = marketing + sales + overhead. CAC is total cost. For e-commerce, they're similar. For B2B with sales teams, CAC is significantly higher than CPA.