If you’re new to digital marketing, being bombarded with industry acronyms can be overwhelming.
For example, CPA can mean cost per acquisition, the amount of money you spent to get or acquire a new client or customer.
CPA can also mean cost per action – that is, the amount of money you spent as an advertiser to get a particular action completed by a user.
We’ll discuss cost per acquisition in this post, and why it’s so important.
Why Is CPA Important?
Otherwise, you’d just be playing a guessing game.
Don’t be that guy.
How To Calculate CPA
For example, if you spent $5,000 on your Google Ads campaign last month and acquired 3 new family law clients, your CPA would be:
5,000 ÷ 3 = $1,666.66
This tells you that you spent $1,666 for each new client last month.
The next question naturally arises; was it worth it?
That all depends on how much you make on each case, right?
So this leads us to the next really important question; what is your average value of a case?
Most of you are probably thinking ¨uhhh. Well, hmmmm. Good question.¨
It’s not only a good question but a really important one.
Family lawyers can typically ball-park an estimate with so-so accuracy.
Personal injury lawyers are another story.
But regardless of what industry or niche you’re in, you really need to get down to the nitty-gritty and calculate your average value of a sale.
An educated guess will not suffice.
Remember, data is king – you have to use accurate data to project accurate results and to budget correctly.