SaaS Glossary
Basic definitions of acronyms commonly used in product management and sales organizations, and
Software-as-a-Service industry

Cost Per Acquisition

Cost per Acquisition (CPA): The cost incurred by a business to acquire a new customer through a specific marketing campaign or channel. CPA is similar to Customer Acquisition Cost (CAC), but it is more focused on the cost of acquiring a customer through a specific marketing initiative or channel. CPA is a key metric for businesses as it helps them understand the efficiency of their individual marketing campaigns and make strategic decisions about how to allocate resources. To calculate CPA, divide the total cost of a marketing campaign by the number of new customers acquired during that campaign. A lower CPA means that the company is acquiring customers at a lower cost, which is generally considered more efficient and sustainable. It's also important to compare CPA to the customer lifetime value, as the cost per acquisition should be lower than the customer lifetime value in order to generate a profit.

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