What is CPA?
Also known as: Cost Per Acquisition, CAC
Cost Per Acquisition — total ad spend divided by number of customers acquired. Often called CAC (Customer Acquisition Cost) in SaaS.
CPA = Ad Spend ÷ Number of Customers AcquiredThe detailed definition
CPA is the inverse of conversion volume — how much you paid for each customer. It's complement to ROAS: where ROAS focuses on revenue efficiency, CPA focuses on acquisition cost. For sub-revenue conversion events (signups, leads, trials), CPA is often the right primary metric because revenue may not materialize until weeks or months later. The complication is what counts as 'acquired' — a trial signup, a first purchase, a qualified opportunity, or a closed deal. Define this upfront and apply consistently. CAC payback period (the months it takes for cumulative revenue from a customer to recover their acquisition cost) is the natural pairing metric for SaaS — typical B2B SaaS targets 6–18 months payback.
Related terms
Frequently asked about CPA
›What's the difference between CPA and CAC?
Functionally none — both measure cost per acquired customer. 'CPA' is more common in DTC ecommerce and performance marketing; 'CAC' is more common in SaaS and B2B. CAC sometimes includes a broader cost base (sales team, content marketing, etc.) while CPA usually refers to just paid acquisition. Treat them as synonyms unless your finance team defines them differently.
›What's a good CPA?
Whatever your LTV economics support. Healthy ratio is LTV ≥ 3× CAC for sustainable SaaS, ≥ 1.5× for capital-efficient growth. For ecommerce, target CAC < gross profit per first purchase if you want first-purchase profitability, or CAC < cumulative gross profit at the 90-day mark if you tolerate longer payback.
›How is CPA different from CPC?
CPC (Cost Per Click) measures the cost of getting someone to click an ad — usually $0.50 to $5 depending on platform and competition. CPA measures the cost of converting them after the click. CPA = CPC ÷ Conversion Rate. Improving conversion rate (better landing pages, smoother checkout) reduces CPA without changing CPC.
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