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Sayedul Mursalin

Cost per acquisition or maximize conversion?

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When you say "maximize conversion", I assume that you mean getting the most conversions possible, without consideration of CPA. 

The CPA is an important metric to follow and improve because this will dictate if the leads are profitable. If the CPA is $90 and the sales closing ratio is 50% (This is a sample ratio and quite high, but I am using this as an example to make a point.), the cost per sale will come in at $180. Knowing the profit margin is key in determining the profitability and target CPA. Let's assume that the margin is 50% and you are selling a one time $200 service or item. This means that the Cost Of Goods Sold (COGS) or Cost Of Sale (COS), is $100. With a CPA of $180, the company is losing $80/sale.

The initial stages of a campaign, the CPA is less important because what is needed is conversion data. You need to learn what works and what doesn't. As the conversion data comes in, you can start optimizing the campaigns and work towards the target CPA. Ultimately, the CPA is more important than the number of conversions since we need to consider profitability. 

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