What break-even CPA means
Break-even CPA is the gross profit one customer brings you. Pay exactly that to acquire them and you make zero; pay less and you profit.
From CPA to max CPC
Ad platforms bill per click, so it helps to turn your CPA ceiling into a bid ceiling. If 2.5% of visitors buy, you get one customer every 40 clicks, so each click is worth your target CPA divided by 40.
First purchase vs. lifetime
Many profitable brands lose money on the first order and earn it back on repeat purchases. If you know customers buy 2.3 times on average, enter 2.3 - but only if you have the cash flow to wait for those repeat orders.
Frequently asked questions
What is the difference between CPA and CAC?
CPA usually refers to the ad cost per conversion inside one channel. CAC (customer acquisition cost) includes all sales and marketing costs across channels.
Should I include repeat purchases?
Include them if you have solid retention data and enough cash flow. Otherwise judge on the first purchase to stay safe.