Target CPA Calculator

How to Use the Calculator – Step-by-Step

1. Enter Customer Profit
   Input the average lifetime profit (not revenue) per customer.

2. Add Acquisition Investment %
   Define how much of that profit you’re willing to reinvest to acquire a customer.

3. Input Lead to Sale Rate
   Add your average lead-to-customer conversion rate.

4. Click ‘Calculate’
   View your target CPA – a key metric to help you optimise your paid marketing ROI.

Understanding Target CPA

Your Target CPA (Cost per Acquisition) is the maximum amount you can afford to pay for a conversion while staying profitable. It’s a foundational metric for advertisers to scale campaigns confidently, especially in industries with long sales cycles or subscription models.

Target CPA = Avg. Profit × (% Willing to Spend) × Conversion Rate

A lower CPA than this value generally indicates strong campaign efficiency. A higher CPA may warrant revising the strategy.

Use this calculator when planning new paid campaigns or adjusting bids for scaling efficiently.

Practical Example

Scenario:

• Average Profit per Customer = ₹10,000

• Willing to invest 25% in acquisition

• Lead-to-sale conversion rate = 20%

Calculation:

Target CPA = ₹10,000 × 0.25 × 0.20 = ₹500

Interpretation:

You can afford to spend up to ₹500 per lead acquisition to remain within your target margins.

Tips to Optimise CPA

• Refine Targeting: Use precise audience segments to improve lead quality.

• Shorten Sales Cycles: Reduce time from lead to conversion.

• Improve Funnel Efficiency: Optimise each stage—landing pages, forms, CTAs.

• Monitor Continuously: Adjust campaigns as actual CPA shifts over time.