A | Stop Guessing: Calculate Your Cost Per Acquisition (CPA) in 10 Minutes
Why CPA Matters for Independent Agencies
Knowing your Cost Per Acquisition (CPA) - or, for rental agencies we call it Cost per Booking (CPB) - is important to grow your agency. Your CPB tells you exactly how much you can spend to win a rental. Knowing your CPB lets you price services and discounts with confidence.
Your CPB is a measurement of how much you spend, on average, to gain one booking. Once you know that figure you can set prices, run promotions, and allocate ad budgets wisely. If you spend $5,000 and earn 40 new renters, your CPB is $125. Compare that figure across each acquisition channel: Google Ads, OTAs, SEO, influencers, social media, and referral programs. You’ll see where your marketing dollars deliver the best return so you can redirect spend accordingly.
Keeping CPB below your profit target allows you to scale advertising, add vehicles, or open new locations without guessing. If CPB rises, it may reflect seasonal shifts, ad fatigue, or pricing issues, giving you time to correct course on your marketing spend before your profits plummet.
The Simple Formula to Calculate your CPB
CPB = Total Marketing Spend ÷ Total New Customers
Don’t just guess your numbers. Gather accurate spend (yes, including agency fees) and count the new customers you gained during that same period.
Still Struggling to figure out your CPB Range? This should help!
CPB vs. AOV What’s the difference?
Cost Per Booking is the dollars you spend to land one new renter.
Average Order Value is the average revenue you earn from a single booking.
Your Guiding Ratio = CPB ÷ AOV = CPB Range
If you aren’t sure what your CPB Range should be, try this trick. Divide your CPB by your AOV to find out the share of each booking’s revenue you spent to get that customer.
If the ratio is 0.10 (10 %), you’re spending a dime to earn a dollar, which is usually sustainable. If it rockets to 0.30+ (30 %), you’re spending 30 cents to earn that same dollar. Can you afford to lose a third of each booking’s revenue before you pay fleet costs, insurance, or staff. You can use this ratio to help figure out your own CPB Range. By basing it on your agency’s average order value, it should help guide you to create a CPB Range that works for you.
Refer back to section 3’s “Pick a Spend-to-Revenue Guardrail” and the “Interpret your Results” sections on how to use these numbers to create your CPB Range and action plan.
How do you know your CPB Range is on target for your market?
Are you still unsure if you’ve chosen a good CPB Range to base your marketing decisions on? Test it to get a reality check:
Speak with your accountant or bookkeeper. They speak in gross-profit numbers; your marketer speaks in CPBs and click-through rates. The CPB ÷ AOV ratio bridges that gap so both teams should know if your campaign plans will earn their keep.
Cross-check with channel stats.
Google Search: Compare your numbers to Google search Ad Planner. What does Google say your competitors are paying per click? Note: that this is their cost per click and not cost per sale. Use your own conversion rate to estimate how many clicks, on average, it will take to earn a sale. That will give you an idea of their CPB from Google Ads.
Referral/OTA fees: Often 10-20 % of booking value; convert to dollars and compare apples-to-apples.
Turn Your Numbers into a Real-World Action Plan
Raw metrics are only half the battle; the real win comes from deciding in advance how you’ll react when a channel drifts above, or drops below, its target CPB range.
Start by plotting out a simple table for every major source of bookings: Google Ads, Meta ads, SEO, referrals, influencer campaigns, even OTAs. Give each channel its own “healthy band” based on the Guiding Ratio (CPB ÷ AOV). For most operators that window sits somewhere between 5 % and 15 % of AOV, but the exact thresholds will differ: Google Ads might stay profitable up to 15 %, whereas a mature SEO program should cost far less.
Once your bands are set, lock in the moves you’ll make at each threshold so you’re never caught guessing. For example:
Channel-by-Channel Examples for Your Action Plan:
Google Ads’ Guiding Ratio target: ≤ 15 %
< 5 % → Scale
Raise daily budget
Broaden keyword list
Add new city / airport targets
5 – 15 % → Maintain & optimise
A/B test ad copy
Refine landing-page offers
> 15 % → Fix / Trim
Tighten geo radius & negatives
Speed-up pages, patch quote-form leaks
Add missed-call text-back
SEO / Organic’s Guiding Ratio target: ≤ 5 % (once rankings mature)
≤ 5 % → Scale with content
Publish new location pages
Build authority backlinks
> 5 % → Investigate
Audit technical SEO
Refresh under-performing articles
Instagram Influencer Campaign observed at 80%
Action: Pause or renegotiate—costs far exceed 15 % ceiling!
Referral / Partnership Program’s Guiding Ratio target: ≤ 10 %
1 – 5 % → Expand
Incentivise top partners
Recruit new affiliates
> 10 % → Rebalance
Review commission split
Improve lead-quality filters
These quick‐reference bullets keep you out of analysis paralysis and ensure every channel stays either in “scale,” “maintain,” or “fix/exit” mode.
Seasonality
Seasonality adds another wrinkle. During peak-demand weeks your cost-per-click will rise, but so should your booking value. By anchoring every bid decision to the same 15 % ratio cap, you avoid outbidding your margins even when holiday traffic surges. Conversely, when CPB edges up yet the ratio remains inside your comfort zone, that’s often a signal you have room to nudge daily rates higher or bundle extras like GPS or collision-damage waivers.
With these pre-made rules in place, one glance at the dashboard tells you exactly which lever to pull first—scale, shore up, or shut down—so your marketing spend is always working at peak efficiency.
Avoid these common mistakes when calculating your CPB:
Miss-Counting Phone Leads – Track calls using call-tracking software and unique numbers to get an accurate count.
Ignoring Lifetime Value (LTV) – A $200 CPB is fine if LTV is $1,500 (see our blog article: L - Lifetime Value for more information about LTV). LINK REQUIRED
“We Don’t Pay for SEO” Myth – In-house hours = real dollars. Include them.
Seasonality Blindness – Re-calculate CPB monthly, not annually.
Action Steps
Run the CPB Calculator for the last full month.
Compute AOV (revenue ÷ bookings).
Divide CPB by AOV.
Create Your Action Plan
≤ 5 % – Pour more fuel on that channel.
5–15 % – Maintain & keep optimizing.
> 15 % – Cut waste: tighten geo-targeting, improve landing pages, or raise AOV with upsells.
Next Steps
Keep the wheels turning — Watch out for metric B = Bounce Rate in the A-Z Profit Playbook. You'll learn which bounces are good and which bounces are bad. Plus you'll get an 8-step checklist to help cut the bad ones in half.
