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PLAIN-LANGUAGE DEFINITION

Allowable CPA

Allowable CPA is the acquisition cost supported by revenue after variable costs and a chosen profit target.

IN PRACTICE

An example

Revenue 60 minus variable costs 26 minus target profit 10 leaves allowable CPA 24.

What this does not tell you

The result depends on assumptions and does not guarantee a campaign can acquire customers at that price.

Use the term precisely

When you use this term in a brief or report, include the relevant source, scope and assumptions. An example explains the concept; it is not a benchmark or a promise of results.

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