# What is CPA – Cost Per Acquisition?

What is CPA – Cost Per Acquisition? The amount it costs to get a customer to complete a desired action.

## How it works in practice

This is the number you need to know by heart: 'how much does it cost me to acquire a new customer?' If CPA = $22 and you earn $17 — you lose money on every customer. But if their LTV is $110, it might make sense.

## Related metrics

- Gross Margin — your maximum CPA is your gross margin
- LTV — a high CPA is acceptable if LTV is much higher
- CAC — CPA and CAC are similar, but CAC also includes headcount
- CR — improving CR by 50% lowers CPA by 33%

## Common misconception

'My CPA is $14 — that's expensive.' It depends entirely. $14 on a $8 product is a loss. $14 on an $85 product is excellent.

## How to fix it

Did CPA rise? Check: (1) did site CR drop? (2) did CPC rise? (3) did bounce rate rise?

## Real-world example

An electronics store: CPA was $90. Launching a dedicated landing page for each product dropped CPA to $50 within a month.

## Where to start

CPA is metric #1. Before checking ROAS, CTR, or CPM — check CPA.

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Category: Marketing · From the [Jimmy OS KPI Glossary](https://jimmy-os.com/glossary/kpi.md) · Source page: https://jimmy-os.com/glossary/kpi/cpa-cost-per-acquisition