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How can you calculate the target Cost Per Conversion (CPA) in Google Ads? Struggling to get a grasp on your business costs and what your target CPAs for various products should be? Here’s how to work out the target CPA in Google Ads.
How do you go about calculating the tCPA? Lydia just explained how you do this is to work backwards. Work from what is the average customer value when they convert into a client? How many times in a year? And when we're working out our customer lifetime value, it's not until when the customer dies, it's usually between six to twelve months. How many more transactions they are likely to do with you? What is the close percentage from sales? Work that out.
So what you want to do is to work out the value per lead and then you work out your cost per lead. So if your cost per lead is $50 and your value per lead is $150. Then you know that you got good margins to play with. So value per lead is what you want to work out, that every time you get a value, every time you get the lead, how much you or your client are potentially earning.
