Two common goals shared by nearly every business? Acquiring new customers and continued growth.
Aiming for a CPA that’s lower than your product or service costs should be the ultimate goal of your marketing strategy. This ensures that your enterprise is seeing the most return on investments while setting your business up for continued success.
What’s A CPA?
CPA stands for cost per acquisition and is a type of conversion rate marketing. Cost per acquisition refers to what a company will pay for an advertisement that results in a sale or conversion.
CPAs + LTV
Businesses looking to scale will need to understand the critical role CPAs and LTV play in their marketing efforts.
What Is LTV?
Lifetime value (LTV) is the net profit attributed to the amount a single customer will spend with a brand throughout their lifetime. Like CPAs, LTV is a critical key performance indicator.
Every business looking to scale will need to pay attention to its LTVs. Loyal customers are a steady source of revenue and are more likely to purchase new products or services. Not to mention, your company won’t spend as much on returning clients as you would acquiring new ones.
In short, higher LTVs will lead to more acquisitions because you know your average client will spend more than the cost of acquiring them.
Related Article: https://geistm.com/content-is-key-to-customer-ltv/
CPA Case Study
GeistM recently rolled out a case study for one of our clients over multiple quarters to gain learnings, diversify network spending, and scale customer acquisition.
The ultimate goal was simple: to increase volume quarter over quarter while maintaining CPA efficiency to ensure profitable growth.
This is where GeistM can help:
- Q2: Launched on several networks.
- Q3-Q4: Scaled on initial networks via content strategy and identified new pockets of efficiency, achieving a $46 CPA compared to the $60 goal CPA in Q4.
- Q1: Began to scale more aggressively to capitalize on Q1 efficiency while maintaining a stable CPA.
- Q2-Q3: Continued to increase spend (+135%) and achieved a 19% drop in CPA quarter over quarter in Q2.
The GeistM team carried this momentum into Q3, spending $980k and earning 21,000+ conversions at a $46 CPA.
Here are the results:
In the end, GeistM successfully scaled conversion volume by 16x while achieving a CPA 21% below the goal through maintaining various active networks. They also included fresh and relevant content angles and iterative creative testing.
Every business looking to set itself up for continued success will have to start seeing lower CPA goals as an affordable, high-ROI strategy that allows businesses to reach niche audiences and grow sustainably.
To get started, you can partner with GeistM today. We have dedicated marketing experts who can help your business hit your acquisition goals all while scaling sustainably.