How to decide what CPL is acceptable?

Question

Hi Guys,

I’ve started capturing leads from paid ads from one of my client’s store in apparel niche.

Currently the CPL is $2.7, which frankly seems a bit high to me, but I’m not sure if I’m right.

The account has a $/recipient of $0.05, not sure if it’s useful but the $/recipient of welcome flow is around $4-6

Please advise how do we look at the cost.

Thanks,

Aman.

Omar · Accepted Answer

Hi @aman_adscellent,I'm no ad specialist but we do help our clients with growth and with lifetime value optimization. A CPL by itself does not say anything if you ask me. It is highly dependent on your business. The products you sell, returns you have, discounts you give etc.The main question you need to answer is if you're profitable?In short, when adding al the costs are you making a profit?Profit = Revenue - All costs (ads, agency costs, cost of goods etc)If this is positive the CPL works for your business. If not it's either to high then it's a matter of getting it down and making sure you get customers coming back for a second or third time (using i.e. email as a channel).Regards,Omar Lovert//Polaris Growth//Klaviyo Master Platinum PartnerKlaviyo - CRO - Customer Value OptimizationSpecialist

alex.hong · Answer

Hey there @aman_adscellent,Thanks for sharing with the Community!I think this would be a good discussion to get going with other Community members. Additionally, I think you can get connected with our Success/Growth team on this to get a better understanding of how to navigate these metrics to drive your success.I look forward to seeing what other Community members have to say regarding this.Alex

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