Data Snacks Video — Cost Per Order



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.

Special thanks to our friends at Daasity for their insights on this topic.

About the author

Steve Hutt

Steve has entrepreneurship in his DNA, starting in the early days of online commerce when he achieved Power Seller status through his eBay store. This propelled him to become a co-founder of VisionPros.com, a contact lens and eyewear retailer. With a successful exit from his startup, he embarked on his next journey into agency work in e-commerce and digital strategy.

Currently, Steve is a Senior Merchant Success Manager at Shopify Plus, where he helps identify, navigate, and accelerate growth in the complex world of commerce.

To maintain his competitive edge, Steve also hosts the eCommerce Fastlane Podcast and Shopify Founder Stories, a top-rated twice-weekly podcast where he interviews Shopify Partners and subject matter experts who share the latest marketing strategy, tactics, platforms, and must-have apps, to help Shopify brands improve efficiencies, grow revenue, profit, and lifetime customer loyalty.

Add Comment

Click here to post a comment