What is Cost per Acquisition (CPA), and how do you calculate it?
In short – Average cost to acquire one paying customer. A key marketplace metrics you should track.
Cost per Acquisition (CPA) Formula
CPA = Total Acquisition Costs ÷ Number of New Paying Customers
Cost per Acquisition represents the total cost of acquiring a customer who makes a purchase. It helps in assessing the effectiveness of marketing spend.
Lower CPA with maintained or increased revenue per customer improves profitability. This metric guides marketing budget allocation.
How can you find your Cost per Acquisition (CPA)?
You should generally be able to calculate your Cost per Acquisition (CPA) with tools you already posess. If that's not the case, signing up for an analytics tool may make sense.
Among others, twosided is one of the tools you could consider. Out-of-the-box, you'll get over two dozens marketplace KPIs and detailed tracking for your supply, demand and other factors that determine marketplace health.
Explore other metrics
Order Frequency
Average number of orders placed by a buyer within a specific period
Cross-Sell Rate
Percentage of transactions that include additional products or services
Supply-Demand Ratio
Ratio of available listings to active buyers
Listing Quality Score
A metric evaluating the quality of product listings based on predefined criteria
User Net Adds
Net increase in the number of users over a specific period