What is cost per order (CPO)?
Cost Per Order (CPO) is a key performance metric that measures the cost of generating a single order, whether through paid advertising, organic marketing, influencer collaborations, or other promotional efforts.
What factors contribute to CPO?
Multiple factors, including marketing efficiency, conversion rates, and customer behavior influence CPO.
- Traffic acquisition costs: High costs in ads, influencer sponsorships, or SEO impact CPO.
- Website conversion rate: A poorly optimized site leads to fewer sales, raising CPO.
- Average Order Value (AOV): Higher AOV helps offset marketing costs and lowers CPO.
- Repeat customers vs. new customers: Returning customers typically have a lower CPO compared to new acquisitions.
- Marketing channel performance: Some channels (e.g., email, organic search) drive lower-cost orders than others (e.g., paid social, PPC).
How to calculate CPO?
Formula
CPO = Total Marketing Spend Total Orders
Example:
- Total marketing spend (ads, SEO, email, etc.): $5,000
- Total orders: 1,000
CPO = 5,000 / 1,000 = $5
Cost Per Order (CPO) Calculator
💡 Tracking CPO across different channels helps brands identify the most cost-effective marketing strategies.
How to reduce your cost per order?
A lower CPO means higher efficiency, better ROI, and improved long-term sustainability. Here are a few ways you can try to reduce CPO:
- Optimize conversion rate (CRO)
- Improve website speed, checkout experience, and product page clarity.
- Use A/B testing to refine CTAs, pricing displays, and trust signals.
- Drive organic traffic & retargeting
- Invest in SEO and content marketing to reduce reliance on paid ads.
- Use email & SMS retargeting to convert past visitors at a lower cost.
- Increase Average Order Value (AOV)
- Offer bundled products, upsells, or free shipping thresholds to maximize revenue per order.
- Implement loyalty programs to encourage repeat purchases.
- Improve ad targeting & efficiency
- Refine audience targeting to avoid wasted ad spend.
- Test automated bidding strategies to maximize conversions at lower costs.
