A simple way to set a target cost per purchase

Ask most brands what they can afford to pay for a customer and you get a guess. A target cost per purchase should be a calculation.

Start with the order

Take your average order value and subtract product cost, shipping, payment fees and expected returns. What is left is the money available to win the order and make a profit.

Then add the repeat value

If customers usually buy again, you can spend more on the first order. Use what an average customer brings in over six months, not a hopeful lifetime figure.

Pick a number, then check it monthly

Set the target below the break-even point so there is room for profit. Review it every month as costs and repeat rates change.

A clear target makes every budget decision easier: if a campaign beats it, scale it. If it does not, fix it or stop.