Practical Methods To Reduce Your Ecommerce Cost Per Acquisition (CPA) Rate

Photo by Brooke Cagle on Unsplash

 

Regardless of the niche industry that you specialize in as an online store, you definitely run advertising campaigns. But have you ever taken the time to consider your Cost Per Acquisition (CPA) rate? And if you have, is there an urge to reduce your CPA rate?

 

What is Cost Per Acquisition (CPA)?

A straightforward definition of Cost Per Acquisition (CPA) is that it is the average cost used to acquire a sale or achieve the desired conversion. This is an important metric that every eCommerce business must take into consideration as it shows the value you get from your campaigns. It is calculated by dividing the total costs of an ad campaign by the total number of conversions or direct sales achieved.

When evaluating your CPA rates, the goal should be to have a lower rate, as this shows your campaigns’ efficiency. A rule of thumb is that the more you spend to have a single conversion, the less efficient your advertising campaigns are. Still, you must remember that different niche industries have varied average CPA rates. Therefore, when analyzing your campaigns, always take into account competitors in the same niche.

 

How to reduce your Cost Per Acquisition (CPA) rates

You are not helpless when it comes to improving your CPA rates, and the best ways to reduce your rates are:

 

1.   Ensure you have no technical issues with your store

A common reason why most eCommerce stores have high CPA rates is that they have technical issues with their sites. These include; broken links, slow-loading landing pages, broken forms, and missing checkout pages. In turn, clients who get to be attracted to the store’s ads get to quickly ignore the site leading to higher bounce rates. To avoid all these problems, you should consistently review your store and have all technical issues resolved to provide a better experience to all potential customers.

 

2.   Have your landing pages fully optimized for conversions

Your landing page needs to entice everyone who gets to it, and this means having it optimized for conversions. Essentially, this means ensuring these pages have high-value content, a clear call to action, simple form fields, and an appealing outlook. The goal is to work towards a simple but highly efficient landing page that will enhance your conversions.

 

3.   Run fully-optimized ads

There is a large audience to reach out to as an online store, and the best way to do this is by crafting and running high-quality ads. A cost-effective and result-guaranteed way to go about this is to embrace technology by opting for AI-driven advertising campaigns. This way, you will have a smart system that is ever analyzing data in your niche industry to create high-value campaigns that will guarantee better ROI.

 

4.   Strive to reduce checkout abandonment rates

A growing concern for many online stores is the high number of clients who visit the store and shop for products but never check out. This calls for a review of the probable reason why they abandon their carts, such as high shipping costs, concerns on payment security, lack of coupon code, and long checkout process.

 

Bottom-line

It is futile to run Ecommerce advertising campaigns if you are not getting top-value for money. By paying attention to your cost per acquisition, you can craft a strategy to reduce these rates and make your campaigns more profitable.

 

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