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CPA Calculator
Cost per acquisition + LTV ratio + payback math. Decide whether a marketing channel is actually profitable, not just cheap.
CPA — formula and benchmarks
To calculate CPA (Cost Per Acquisition) properly you need four numbers: total ad spend, customers acquired, average revenue per customer, and gross margin. CPA on its own is meaningless — pair it with LTV to see if the channel is actually profitable.
The formula
CPA = total spend / customers acquired LTV = avg revenue × gross margin LTV : CPA = LTV / CPA Profit = (LTV − CPA) × customers
What healthy numbers look like
- B2C e-commerce: $30-150 CPA depending on AOV.
- B2B SaaS (self-serve): $100-500 CPA.
- B2B SaaS (sales-assisted): $500-5,000+ CPA.
- LTV:CPA ratio: 3:1 minimum, 5:1+ excellent.
Common mistakes the calculator avoids
- Using revenue instead of LTV — overstates profitability by 30-50%.
- Skipping gross margin — a $200 CPA with 30% margin is much worse than with 80%.
- Comparing CPA across channels without LTV context — channels with cheaper customers often have lower LTV.
How to use this calculator
Four inputs from your CRM + finance. The verdict is automatic.
Total ad spend
All-in: media + agency + tools + share of allocated salaries. Last 30 days.
Customers acquired
Only paying customers attributed to this channel, in the same period.
Avg revenue per customer
First-year revenue. For LTV, multiply by expected years × retention.
Gross margin %
Revenue minus COGS, as a %. Most SaaS: 70-85%. E-com: 40-60%.
Read the ratio
Below 3:1 = unprofitable. 3-5:1 = healthy. 5:1+ = scale up.
Frequently asked questions
Depends entirely on LTV. CPA is fine if LTV:CPA ratio is at least 3:1 and payback under 12 months. A $20 CPA is awful if LTV is $40; a $500 CPA is great if LTV is $5,000.
CAC includes sales team cost; CPA usually only ad spend. For pure inbound SaaS, CPA ≈ CAC. For sales-led B2B, CAC is 2-3× CPA because sales salaries dominate. Use our CAC calculator for the fuller picture.
If the channel requires sales team to close, yes — include allocated commissions per customer. If self-serve, no. The cleanest rule: anything that scales linearly with customer count belongs in CPA.
Under 12 months for B2B SaaS, under 6 months for SMB / consumer. Over 24 months indicates a cash-flow problem even if LTV:CPA looks healthy.
Either lift conversion rate (more customers from same spend) or cut spend (smaller acquisition volume). Conversion-rate work usually compounds; spend cuts often kill volume. Test the conversion-rate lift impact first.
Usually one of three: audience saturation (cheap audiences exhausted), creative fatigue (same ad seen too many times), or competition increasing CPCs. Audit creative rotation + audience expansion first.
