Marketers: here’s the secret to lowering your CPA

Who here is worried about their rising CPA? Raise your hands! 

There’s no shame in being worried. Social Media Marketing is getting more expensive. As consumers shift more of their attention to social media, the cost of marketing on these channels increases. That’s the new reality. Social Media Marketing is more expensive, more competitive, and risks becoming less effective. 

But, I’m here to tell you that I’m not worried about rising Cost Per Acquisition. 

I’ve found a simple solution to lowering your CPA by up to 34%, making social media marketing more effective.


That’s not nothing!

If you have a marketing channel budget of 10,000 dollars, you could save $3,400. Think of what you could do with that money…

So, do you want to know the secret? 

Before I tell you, let’s just make sure we’re all on the same page when it comes to terminology.

Calculate how many referrals you could get by launching a referral program…

What is CPA?

CPA is the cost per acquisition. It refers to how much money a company has to spend on a marketing channel to gain a new customer-defined as someone who makes a purchase of your product. 

So if I invest $5,000 dollars in an email campaign, and get 5,000 new customers, my CPA is $1. 

Simple, right? 

How did CPA get so high?

This isn’t as simple. CPA has soared recently. 

Just over a decade ago, companies like Facebook and Twitter burst onto the scene, pumping fresh lifeblood into marketing. Suddenly, there were all these amazing new channels to reach potential customers. 

Honestly, it felt like a goldmine. 

And then, as the years have gone on, these channels have gotten much more expensive. Suddenly, we’ve found ourselves pumping so much money and energy into reaching potential customers on social media with more and more diminishing returns. In 2019, the CPM (cost per 1,000 impressions) on Facebook grew by over 90% in some cases. 

That’s nearly double!

What used to be enough money to reach 2,000 users is now enough to reach only half. 50% of marketers are at risk of being priced out of Facebook altogether. 

Let’s be real: that’s scary. 

This has risen because social media platforms are where users spend much of their time. Therefore, the ad space is in high demand. 

When there’s high demand and limited supply, prices go up. And that means your marketing dollars go a shorter distance. 

But enough with the doom and gloom…

How do you adapt?

A smart marketer is always adapting. When you see a problem like “rising CPA,” you immediately start thinking “How can I adapt? How can I start lowering my CPA?” 

What do you do? Do you target new demographics? Pump out a fun new creative campaign? Abandon Facebook? 


If being an entrepreneur has taught me anything, it’s that the best solutions require some out-of-the-box thinking. Instead, you should be asking “How can I turn 4 customers into 5?” 

Yes, the key to lowering your CPA is to turn your existing customer base into a bigger one. 

The critical tool for lowering CPA is referral marketing

How does referral marketing work? 

Referral Marketing works like this: say you have a business selling pumpkin pies (yum!). You have a customer named Jane who loves your pumpkin pies. She buys one every week. 

You go up to Jane. You tell her that for every new customer, she brings to you, Jane now gets her pie at 15% off. 

Now, Jane is empowered to tell her friends about your amazing pumpkin pies. You make more sales, and Jane gets a discount. 

That’s referral marketing. 

How does referral marketing lower CPA?

Referral Marketing helps lower your CPA because it turns your existing customers into a new marketing channel. 

Let’s say that you spend $10,000 to get 500 new customers. Now let’s add in a referral marketing program where each referrer gets a $5 dollar reward for successfully referring each friend.

200 of your new customers refer their friends, and suddenly you have an additional 200 customers buying your product. 

So instead of spending $10,000 on 500 customers, you actually spent $11,000 on 700! 

Your CPA went from $20 to $15.72

How can I create my own referral marketing program?

One of the biggest fears I’ve heard is “Isn’t it too hard to manage your own referral marketing program? 

Don’t I need to develop my own referral software

What should I offer as a reward?” 

We thought about this issue and realized that the solution is delivering a powerful referral program that brands can easily use and adapt in order to lower their CPA. At Referral Factory, that’s exactly what we created. 

Auto-generate a referral program
for your business using AI

With Referral Factory, you can develop your own referral marketing program without any coding or referral marketing experience.

When you sign up for a No Code Solution like Referral Factory, you can choose from 1000s of pre-existing referral program templates, upload your unique copy and sales collateral, and design your own landing page in order to fully customize your referral program. 

This solution allows you to add referral loops to your existing social media ad buys, generating unique referral links that your leads can share with their friends, all of which help lower your CPA.

We call this “the marketing channel that works in your sleep.” If you’re curious to know more about how referral marketing works, check out our guide here. 

That’s my secret!

Rising CPA can be intimidating, but it doesn’t have to mean the end of your social media marketing. Instead, you have to stretch the value of your marketing budget by turning 4 leads into 5 with referral marketing. You can get some more campaign examples and referral program ideas here, these are useful when planning the launch of your own referral program!

Learn By Referral Factory
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