When you compare markets, what KPI defines a healthy CPA?

Story time!
As a central team, we created a global strategy and report to monitor marketing spend across our marketing channels. But how do you compare spend between markets like Sweden and Thailand using the same framework and report?

When assessing marketing campaign success, KPIs like CPL and CPA/CAC are crucial. Yet, when comparing markets, the more interesting question arises: What defines a healthy CAC?
200 EUR in Stockholm holds a vastly different value than in Bangkok. To evaluate rider acquisition campaigns, we corrected monetary KPIs to reflect these local values.  

By indexing KPIs against the 'average hourly rider salary,' we set a ‘payback period’ KPI to establish a CPA benchmark. Successful campaigns showed a payback period of x hourly rider wages or lower, while underperforming ones exceeded y hourly wages.

In a second iteration of the project, we leveraged CLTV to adapt CAC targets based on retention forecasts. When retention rates were subpar, the CAC benchmark shifted to lower targets. This approach flagged markets to focus on either acquisition or retention, depending on market dynamics.

I think it’s worthy to note, there will never be perfect balance. You will always work on both acquisition and retention, and prioritise one or the other. 

TLDR;
Requirements for standardised market review:
- consistent KPIs across all markets,
- uniform measurement methodologies, and
- regularly updated variable metrics for indexing and benchmarking (in this case avg hourly salary indicator)

What are some unconventional variables you use to evaluate your marketing campaigns?

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