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Retailer has an Unexpected Spike in Customer Cost Per Acquisition (CPA)

Retail marketers spend a large portion of their marketing budget to acquire new customers, and cost can vary drastically across different customer segments. Ensuring you are optimizing your marketing dollars to acquire the best customers within your most profitable customer groups is essential to the success of your business. Today’s story shows how this retailer was notified about an increase in customer cost per acquisition (CPA) for a specific customer group that was not accompanied by an expected corresponding increase in site traffic or revenue. 

This week’s outlier was identified for a retail marketplace that sells products from over 12,000 brands.

Reading How A Sudden Increase in CPA Impacts Marketing Efforts
Reading How A Sudden Increase in CPA Impacts Marketing Efforts

Two months ago Outlier notified the retailer of a two-fold increase in the customer cost per acquisition for a specific customer group. The gross CPA increased because of a planned increase in ad spend, which wasn’t followed by a similar increase in gross sales. The customer was able to monitor the CPA trend for the customer group and worked to bring the cost per customer acquired to an optimized level. 

Last week, this metric returned to normal levels, after remaining well outside the expected range for the last two months. Outlier alerted the retailer to the initial increase in CPA, and also alerted the retailer when the CPA returned to its normal, expected range two months after the original spike occurred. 

Without Outlier’s Automated Business Analysis platform, the customer might not have been alerted to the increase in CPA for one specific customer group unless they were tracking CPA for this group on the specific day the initial increase began. Since the CPA could have continued well outside the optimal range indefinitely, Outlier’s identification of this trend saved the retailer potentially many thousands of dollars of customer acquisition budget for this customer group.  

Retailer has an Unexpected Spike in Customer Cost Per Acquisition (CPA)
Retailer has an Unexpected Spike in Customer Cost Per Acquisition (CPA)

You too can identify meaningful trends in your data with Outlier. Without Outlier, these kinds of insights would require hours, days, weeks or months of analysis and would have potentially gone unnoticed altogether. Outlier empowers businesses to take a deeper look at their data and uncover unexpected trends that can help avoid unnecessary spending of the marketing budget.

Sign up for a custom demo to see how an American retailer identified an increase in customer CPA.  

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