Your target CPA is a made-up number
Ask where the target came from. In many account audits, the answer is some version of "it seemed about right".
It was what a previous agency ran. It was what the account was doing the month someone set it. It was a figure the owner felt they could afford per lead, which is a fine instinct and a poor target, because affordability per lead depends on which leads, and the target treats them all the same.
We reviewed an account with a £9 target where forms and phone calls were counted as equal conversions. The owner estimated that forms closed at about 20 per cent, qualified calls at about 50 per cent, and 90 per cent of booked work completed. At £200 contribution per completed job, the expected values are £36 for a form and £90 for a qualified call. Those are illustrative values until the CRM data validates each input.
How to derive one
Four numbers.
What proportion of each lead type becomes a customer. Forms, ad calls, website calls, chat. Your CRM has it, or your receptionist does.
What a completed first job or order contributes after variable costs, not just what the customer pays.
What proportion of booked work actually completes.
What you can spend.
Expected contribution per lead type is close rate, times completion rate, times contribution per completed job. That number can inform the conversion action after the definitions and samples are checked. Value bidding then has a business distinction to optimise. If a target ROAS is needed, it should come from the economics and risk constraint rather than a hunch.
Why it matters
A target and a conversion value are different instructions. A £9 target CPA asks for the selected conversions at an average £9 cost. Values of £36 for a form and £90 for a qualified call tell a value-based strategy that the outcomes are not equivalent. Auction-time results are not guaranteed, but the second setup at least communicates the commercial distinction.
Sources checked
Tell us your unit economics and we'll work out your targets.