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This far, we've been focusing on the conversion metrics within a marketing metrics.
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However, you can also capture the impact of marketing campaign in
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terms of revenue using metrics that capture the financial cost.
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These include cost per acquisition and lifetime values.
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Let's tackle cost per acquisition first.
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Before we get started,
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acquisition refers to a non-paying customer.
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Cost per acquisition focuses on the sales and marketing costs including cost of supplies,
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labor and marketing, overhead,
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and sales that it took to convert a non paying customer into a paying customer.
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You calculated by dividing the marketing and sales cost by the number of newly customers.
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If you're feeling confused about CPA and CAC at this point,
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don't worry, it confused me too.
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Let's go over the difference between these.
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CPA is focused on the marketing and sales cost,
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so it includes overhead and salaries for staff in addition to marketing and sales costs.
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CPA also focuses on sales leads,
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not actual paying customers.
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