Find your break-even CPA
| Step | Example |
|---|---|
| Average first job value | $1,200 |
| Gross margin | 50% |
| Profit per first job | $600 |
| Break-even CPA per customer | $600 |
| Target CPA, leaving room for profit | $300 or less |
These are example numbers. If customers return, use lifetime profit instead of the first job, and your break-even CPA rises.
Define the acquisition first
CPA changes with what you count. Cost per lead is lower than cost per qualified lead, which is lower than cost per customer. Decide which one you manage to. Profit lives at the customer level, so that is the number to watch, even if you report all three.
To track cost per customer in Google Ads, send back which leads closed. Google's enhanced conversions for leads match closed deals to the original click.
Ways to improve CPA
- Stop spending on keywords that bring leads but no customers.
- Improve the landing page so more visitors contact you.
- Call leads back within minutes.
- Bid more where customers come from, less elsewhere.
Good example. A personal injury firm knows a signed case is worth thousands. It accepts a high cost per lead because its cost per signed case stays far below that value.
Bad example. A house cleaner copies a lawyer's target CPA, and every booking from ads loses money.
Benchmarks can mislead
Industry averages mix very different businesses, areas and conversion definitions. Use them as a rough sense check at most. Your own margins and close rate set the real target.
Read what CPA is. Our PPC management sets target CPAs from your margins.