Through tools like Google Analytics, most simple e-commerce sales or leads can be attributed to some form of digital marketing or a specific campaign. Measuring a cost per acquisition (CPA) is so important, as this lets you know if your marketing activities are successful and how successful they are in comparison to other channels.
By either creating goals in Analytics or by using E-Commerce Analytics in there, you can see how well each channel (organic search, PPC, email, direct, referrals) is doing in terms of sales or leads. Then by simply dividing the amount spend on that channel by the amount of leads or sales, you can get a clear CPA.
Setting a Target CPA
Before running any campaigns, it is important to set our a clear target CPA, and decide what is the maximum you are willing to spend on each customer. If you are willing to spend no more than £5 per customer, then targeting Google Adword keywords that cost £6 per click isn’t going to work well for you.
The ideal cost per acquisition is based on a number of factors, mainly the cost and profit margin of your products as well as the customer lifecycle, as in many cases it could be better to lose money on the first sale if you are likely to turn that first sale into a long term customer.
But for Mobile…
Mobile buying patterns can sometimes make cost-per-acquisition tricky to measure, as many customers cross between different devices when purchasing, so mobile is used more often for browsing, and tablet or desktop are then used to make the purchase. This is ever-changing though, as consumer trust in paying on mobile increases. But as more and more of us own multiple devices, we as marketers need to take this into consideration.
So if you attract more mobile customers onto your website, but very few convert, it is worth looking to see if you get a spike in desktop and traffic either from a branded Google search (searching for your business name) or direct to the site and converting.
If you don’t measure CPA
Then you are blindly spending money on your marketing campaigns. An overall cost per acquisition, by taking into account everything you spend on marketing with how many sales you have made is a start, but for full control, you really need to be breaking everything down into each channel, so you know whether you should be shifting spend across from one to the other.
Get our news direct to your inbox
Subscribe to our mail list