Cost per Acquisition has its place; specifically when every conversion has the same value to you. But how often does this really happen in the real world? Practically never!
The most common application for CPA is for customers who are trying to gain leads. So you should determine if every lead has the same value for your company.
Typically each company has different forms on their website that are used to gain leads. For example:
- Enter your email for our newsletter
- Enter your name and email for a free download
- Enter your personal information for a follow up call
So do each of these have the same value for your company? Doubtful! If you dig into your CRM system, you’ll see that the close rate for each of these lead types is going to be different, and their total lifetime value will be different.
Does your contact form ask a question like, “Which product are you interested in?” For example, in software sales it’s common to have an entry-level, Professional, and Enterprise product. Do each of these products have the same sale price, or are they different? Is the enterprise version more valuable to your business than the entry-level version? Of course it is!
So it’s easy to see that even leads typically have a different value. In our example, if Enterprise software makes your company the most money, then wouldn’t you like to optimize your pay per click to go after these customers? The best part is, you’re not sacrificing the other customers. You’re actually optimizing for all by learning what works best in each case.
Now that you see that each lead has a different value, then it’s easy to see that Finch’s Cost per Value model is better. The value of each lead is reported through Google AdWords Value tracking when the lead is captured. Then Finch’s Cost per Value bidding adjusts ad spending dynamically based on the value that is being returned. Finch will optimize your ads to return the most value possible given the amount spent.