What is going on, all of my eComm champions? We are back again with another Data Snacks.
I'm super excited to talk about another essential marketing KPI this week: Cost Per Order (CPO). What CPO is, is the marketing dollars needed to drive any purchase to your store, so both the new and the returning customer.
Why is this super important? As we mentioned last time, as we're tracking Cost Per Acquisition (CPA), we want to track CPO at the same time. CPA will tell us how expensive it is to acquire a new customer. CPO will tell us how expensive it is to acquire any customer.
So, we can start to look at what is new acquisition cost vs retention acquisition cost.
When we really get into the weeds here and start to track this over time, we can start to get an understanding of, “Okay, our CPA is going to increase as it gets more expensive to acquire more customers. But, can we put in more retention-focused marketing efforts like email, SMS, retargeting campaigns, a reward and loyalty program? So, those cheaper marketing costs are driving a lot of orders as well—that way, we can balance the two out so we can understand how effective our marketing budget is performing.”
So, Cost Per Order is another data point to look at and keep in mind as you're growing your business. These metrics are the unknowns that really help you as you monitor and track them to grow your business faster.