Your CPA Obsession Is Killing Revenue Growth

If you’re running Google Ads for your ecommerce store, chances are you’ve been told to focus on one number above all others: your CPA. Cost Per Acquisition is often held up as the metric that separates good campaigns from bad ones. And yes, on the surface, a lower CPA sounds like a win. If you can reduce the amount it costs to acquire each customer, surely that means your ads are working harder and delivering more for your money.

But the numbers don’t always tell the full story. Time and again, we see business owners celebrating a drop in CPA – from, say, £40 to £28 – only to then find their monthly revenue heading in the wrong direction. On the spreadsheet, it looks like progress. In the bank account, it looks like a problem.

The issue is that CPA tells you one thing: how much it costs to get a customer through the door. It doesn’t tell you what they bought, how much they spent, or whether they’ll ever come back. Focusing purely on acquisition cost, without understanding customer value, can lead to decisions that hurt growth rather than help it.

Efficiency is important, of course. But not at the expense of effectiveness. If your lower CPA is driven by lower-value customers—those who buy once, buy cheap, and disappear—then you haven’t really saved anything at all. In fact, you might be spending more to earn less.

The question isn’t just “what did it cost to get them?”—it’s “what are they worth to your business?” That’s where your attention should be. Let’s unpack why chasing a cheaper CPA might be costing you money, and what smarter metrics you should be tracking instead.

Why Lower CPA Can Mean Lower Profit

Here’s a classic example.

You’re running two campaigns:

• Campaign A: £20 CPA
• Campaign B: £30 CPA

Your instinct says Campaign A wins – it’s cheaper per customer, but let’s assume Campaign A’s customers spend an average of £100.

Campaign B’s customers spend £150.

Do the maths. Both generate a 5:1 return. The profit is identical. But if you pause Campaign B just because it looks expensive, you’re leaving revenue on the table. Even worse, when you squeeze too hard on CPA, you often attract bargain hunters who buy once and never return.

In short, you save on acquisition costs but lose on customer quality.

What Actually Matters

Here’s the reality: customer acquisition is getting more expensive. Over the past five years, the average cost of acquiring a new customer has risen by 60%. In ecommerce specifically, we’ve seen a 40% increase between 2023 and 2025 alone. It’s no longer sustainable to rely on the same tactics or obsess over CPA as your north star. 

The playing field has changed and so should your approach to measuring success.

Focusing purely on CPA is a bit like staring at the price tag without checking the receipt. It tells you what you spent to get someone in, but not what you earned as a result. That’s where Return On Ad Spend (ROAS) comes in. It shows how much revenue you’re bringing in for every pound spent. If you’re seeing a 5:1 ROAS, for instance, that means £5 in revenue for every £1 invested. It’s a good starting point for understanding how well your ads are performing.

But even ROAS doesn’t tell the full story. It’s transactional, and what you really need is a long-term view. That’s where LTV:CAC comes in—the ratio of a customer’s Lifetime Value (LTV) to their acquisition cost (CAC). If it costs you £30 to win a customer, how much will they go on to spend over their lifetime? That’s the real test of profitability.

A strong benchmark is a 3:1 ratio. That means your customers are spending three times what it cost to acquire them. Drop below 2:1 and you’re likely burning through cash to buy short-term wins. But go too far in the other direction – say 5:1 or higher -and it could be a sign you’re playing it too safe. If your returns are that strong, there may be room to invest more aggressively and scale faster.

The metrics that matter most aren’t always the ones that look best in a dashboard. They’re the ones that help you grow with confidence.

Beyond Single Metrics

CPA becomes meaningful only when it sits alongside other data. 

On its own, it’s misleading.

Here’s what we track at Qoob:

• CPA – how much it costs to acquire a customer
• ROAS – how much revenue each pound of ad spend generates
• Average Order Value (AOV) – what each customer spends
• Repeat Purchase Rate – whether they come back

Together, these show whether your campaigns actually drive profit, not just clicks.

If you’re running ads across multiple platforms, look at your Blended CAC – your total marketing spend divided by total new customers. 

This keeps you from falling into the trap of “cheap” Google Ads while Meta or TikTok quietly drain your margins.

And then there’s MER (Marketing Efficiency Ratio) – total revenue divided by total ad spend. A healthy MER usually sits around 20–25%. 

That means you’re spending roughly 20–25p in advertising for every £1 of revenue – a sustainable ratio for growth.

The First 90 Days

CPA tells you what it cost to get the first sale. But it tells you nothing about what happens next. And in ecommerce, what happens next is where the real value lies. The first 90 days after a purchase are crucial. If a customer doesn’t buy again during that period, the chances of them turning into a long-term, loyal buyer drop significantly.

Without a proper retention strategy in place, only 32% of customers make a second purchase in their first year. That means your Google Ads might look efficient on paper – tight CPA, good ROAS – but in practice, you’re just renting revenue. Those early wins don’t add up to sustainable growth if people don’t come back.

The truth is, not all customers are equal. Some are one-and-done, never to be seen again. Others return regularly, buy more, spend more, and become brand advocates over time. The challenge is that when you optimise your campaigns solely for low CPA, you attract both types – but you won’t know which is which until it’s too late to do anything about it.

The smarter play is to dig into your data. Look beyond the first purchase and identify which campaigns, channels or even keywords are bringing in customers who come back for more. These campaigns might come with a higher CPA, but they’re worth far more in the long run. You’re not just buying a conversion, you’re buying a customer.

So, be willing to pay more to acquire the right kind of buyer. Because the goal isn’t just to make the sale. It’s to build a business that keeps on selling.

What To Do Instead

Here’s where to start this week in your Google Ads account:

1. Check ROAS by campaign. Look past CPA and identify which campaigns truly drive revenue.
2. Track repeat purchase rates. In Google Analytics, go to Acquisition > Campaigns, then add User Type (new vs returning).
3. Segment by customer value. Find your high-value buyers. What did they buy first? What search terms brought them in? Build more campaigns like those – even if the CPA is higher.
4. Calculate real LTV. Look at customers from 6–12 months ago. How much have they spent since? Divide that by your acquisition cost. Aim for 3:1 or better.
5. Stop killing campaigns for high CPA. Check the customer quality before pausing anything. That “expensive” campaign might be your profit engine.
   

The Real Metric

What you’re really measuring isn’t the cost to acquire a customer, it’s how much revenue you generate for every pound spent on acquisition. That single shift in thinking changes everything. It brings into focus all the things CPA leaves out: customer loyalty, average order value, and lifetime spend.

A £40 CPA might look steep at first glance. But if those customers go on to spend £200 and come back three more times, it’s a much stronger return than a £20 CPA that attracts one-time buyers who spend £50 and never return. The numbers make the case: cheaper isn’t always better.

The goal isn’t to acquire customers at the lowest possible cost. It’s to acquire the right customers, ones who are profitable, who come back, and who fuel sustainable growth. That means shifting your focus from efficiency to impact.

So, the next time you review your ads, don’t just look at the CPA column and call it a day. Dig deeper. Look at revenue. Look at repeat purchase rates. Ask yourself the only question that really matters: Are we actually making money?

Because that’s what it all comes down to. Not clicks. Not conversions. Profit.