CPA (cost per acquisition)
The average cost to gain one customer or complete one defined action, such as a purchase or sign-up.
Definition
Cost per acquisition divides total marketing cost by the number of acquisitions. The word acquisition must be defined in advance: a sale, a lead, an app install. CPA helps judge whether a channel is affordable compared with the value of a customer. It can be misleading if the acquisitions are of different quality or if some would have happened without the advertising. Compare it with margin and lifetime value, and agree what is included in cost. Define the numerator and denominator in the contract, including which costs count, so the figure cannot be changed quietly between reports.
In a sentence
The target CPA was set below the average order margin.
They compared CPA across channels using the same definition of a sale.
