Cost Per Acquisition

Also called CPA and Cost Per Action

Cost per acquisition (or action): what you pay to get one conversion, whether a signup, lead, or sale, from a campaign. Narrower than CAC, which includes all sales and marketing costs.

CPA = campaign spend / conversions

Why it matters

CPA tells you the efficiency of a specific campaign or channel at driving a specific action. Comparing it to what that action is worth decides whether to scale the channel or kill it.

For example

A campaign spends 1 lakh and generates 200 signups, so the cost per acquisition is 500 rupees per signup.

Go deeper

Startup Killer: the Cost of Customer Acquisition For Entrepreneurs · article This is the piece almost every other CAC and LTV explainer quietly borrows from, and it is still the clearest place to actually learn the ideas. Skok walks a first time founder through what it costs to win a customer, what that customer is worth over time, and why the gap between the two quietly kills companies. It is a starting point for building your own numbers, not a formula to memorize. Open forentrepreneurs.com →

Related terms

Customer Acquisition Cost Cost Per Click Return on Ad Spend

Also in Starting Up

See how founders actually handle this on Money, pricing and metrics, part of the Starting Up hub.

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