What is CPA and how can you reduce it?

Today’s companies must look for commercial strategies that aim to increase sales while improving/reducing cost per acquisition. In such a changing environment, finding new ways to get users interested, discovering new channels and also achieving the sales target is not an easy task.

The CPA or Cost per Acquisition is the price that a company pays to achieve a sale. It is only paid when an acquisition occurs and for this the organization must have 100% defined the event on which it will be applied and the costs of the project. The event is usually the moment when the service is installed (e.g. a fiber in the home) or the product contracted (e.g. a hair graft).

It must be taken into account that the cost of the project must include all the tasks, actions and technologies used to reach the objective: landing pages, investment, creativities, copies… so it is necessary to dedicate enough time to have each item identified.

How is the CPA calculated?

To calculate the cost per acquisition of a sale, consider the total advertising spend, creative development, Conversion Rate Optimization (CRO) techniques… and divide it by the number of acquisitions generated.

Now that you know how to calculate it you are probably wondering how you can improve or reduce it. Basically this is achieved by combining the following factors:

• The choice of a suitable channel.
• Selecting the right keywords.
• Applying best practices by sector in terms of contacting the user.
• The most important thing: To know if the lead has been converted into a sale or not.

7 tips to improve this important indicator

1.Content hyper-segmentation

With the analysis of the data obtained through the digital footprint we can segment the target audience very well. This allows more specific campaigns, with geographic segmentation, by IP… with more probabilities of conversion. For example: creation of landings, display of information appropriate to the target, etc.

2. Traffic must go to landing pages

This can be achieved by directing traffic to landing pages, which are designed specifically for conversion, so that the user does not leave the page without interacting.

3. Include the telephone option in landing pages

Most of the time this tactic is quite effective since it allows to immediately serve the qualified lead as a hot lead. For the user this is a big plus since he can get the information he needs at the moment he decides, so his buying attitude becomes more proactive and the possibilities of conversion increase.

4. Track campaigns in real time 

This monitoring allows the campaign to be optimized according to the results obtained in real time. For example, you can increase your investment in the keywords that are generating the most sales.

5. Prioritize hot leads

The immediacy at the moment of contacting a hot lead is very important, special attention should be given to them since they are those possible clients that have a higher conversion rate.

6. Technology support 

At Global ROI Hub we activate campaigns and manage leads by applying our proprietary AI-based Lead-to-Revenue Management technology.  These processed and nurtured leads are efficiently delivered to the assisted sales channels: call center or face-to-face sales network.

Want to learn more about Global ROI Hub? Click here

Originally published in our Global ROI Hub newsletter.