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Why You Shouldn’t Overlook CPA

By Matthew Rogers, ToxicFox.co.uk

As a seasoned digital marketing professional, I’ve witnessed a revolutionary increase in the amount of data being provided to us through a plethora of tools, as well as much greater insight and understanding of how to use this data in more cost effective and time saving ways. But as with any tool, an enlightened understanding comes with much higher and tighter scrutiny of results.

We have now reached a point where many of our digital footprints are tracked, analyzed and used through specialist targeting tools to look at anything from the way we behave on sites and what triggers us to convert; to more general demographic, even topographical, data that will ensure our marketing budget hits the right people.

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And with this newly created and better understood data, we use our KPIs (Key Performance Indicator) to measure the effectiveness and impact of our efforts so that we might better optimize our campaigns for future efforts.

But through utilizing the often overlooked calculation of CPA (Cost per Acquisition), you can be more effective in your marketing efforts before you even spend a penny.

Your CPA, simply put, is the amount of money you can spend on acquiring a customer.

Many of us know how much our product costs to us, the supplier. This includes the taxes, labor and delivery charges to name but a few, so we are then able to calculate the true cost of a product – many of you will have already done this. We also know how much we want to sell these for, taking into account sales or vouchers. The margin we are left with is a break even CPA.

If we sell a product to the customer for £100 and it costs us £50 to make and deliver this item, we know that we have a budget of £50 to spend to sell this item to a break even CPA.

Now this is a simplistic, 1 to 1 view. Of course with any marketing activity you will be looking at a volume, so understanding your CPA you will be able to work out how many units you need to sell in order to really break even and onwards for a profitable marketing campaign.

Using your CPA, you can start to plan out more cost effective and hopefully more profitable campaigns which will add value to your bottom line.


Matthew Rogers heads up the digital marketing team for online gift retailer toxicfox.co.uk who specialize in personalized and funny gifts. Based near Manchester UK, toxicfox.co.uk have continued to grow for the past three years through well-timed and measured marketing campaigns and by offering gift inspiration to their customers.

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