CPS (Cost Per Sale) Calculator
This calculator helps you determine your Cost Per Sale (CPS) by dividing the total cost spent on marketing or advertising by the number of sales generated from that spending. It's a key metric for evaluating the efficiency of sales-driven campaigns.
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Understanding Cost Per Sale (CPS)
What is CPS?
Cost Per Sale (CPS) is a performance marketing metric that measures how much it costs a business to acquire a single sale through a specific marketing campaign or channel. It's calculated by taking the total cost of the campaign and dividing it by the number of sales directly attributed to that campaign.
CPS Formula
The formula is straightforward:
CPS = Total Cost / Number of Sales
For example, if you spend $500 on an ad campaign that results in 10 sales, your CPS is $500 / 10 = $50 per sale.
Why is CPS Important?
Tracking CPS helps businesses:
- Evaluate the profitability of different marketing channels.
- Understand the true cost of customer acquisition through sales activities.
- Optimize budgets by shifting spend to channels with lower CPS.
- Set performance benchmarks for sales and marketing teams.
- Determine if a campaign's cost is justified by the sales it generates.
CPS Calculation Examples
Click on an example to see the details:
Example 1: Small Facebook Ad Campaign
Scenario: A small online shop runs a Facebook ad campaign to sell a new product.
Known Values: Total Ad Spend = $200, Number of Sales from Ad = 8.
Formula: CPS = Total Cost / Number of Sales
Calculation: CPS = $200 / 8
Result: CPS = $25.00 per sale.
Conclusion: It cost the shop $25 on average for each sale generated by this specific campaign.
Example 2: Email Marketing Campaign
Scenario: A business sends an email blast to subscribers promoting a service.
Known Values: Cost of Email Service & Staff Time (attributed) = $350, Sales from Email Clicks = 14.
Formula: CPS = Total Cost / Number of Sales
Calculation: CPS = $350 / 14
Result: CPS = $25.00 per sale.
Conclusion: The email campaign resulted in a CPS of $25.
Example 3: Trade Show Booth Cost
Scenario: Attending a trade show resulted in several new client sales.
Known Values: Total Booth Cost (rent, setup, travel, staff time) = $5000, Sales closed from Trade Show leads = 5.
Formula: CPS = Total Cost / Number of Sales
Calculation: CPS = $5000 / 5
Result: CPS = $1000.00 per sale.
Conclusion: Each sale generated through the trade show cost an estimated $1000.
Example 4: Search Engine Marketing (SEM)
Scenario: Running paid search ads (Google Ads) for a month.
Known Values: Total Ad Spend = $1500, Sales tracked from SEM = 50.
Formula: CPS = Total Cost / Number of Sales
Calculation: CPS = $1500 / 50
Result: CPS = $30.00 per sale.
Conclusion: The SEM campaign had a CPS of $30.
Example 5: Influencer Marketing Campaign
Scenario: Partnering with an influencer to promote a product with a tracking code.
Known Values: Payment to Influencer = $1000, Sales using the influencer's code = 25.
Formula: CPS = Total Cost / Number of Sales
Calculation: CPS = $1000 / 25
Result: CPS = $40.00 per sale.
Conclusion: The influencer campaign's CPS was $40.
Example 6: Direct Mail Campaign
Scenario: Sending out postcards to potential customers with a unique offer code.
Known Values: Cost of Printing & Postage = $800, Sales using the offer code = 16.
Formula: CPS = Total Cost / Number of Sales
Calculation: CPS = $800 / 16
Result: CPS = $50.00 per sale.
Conclusion: The direct mail campaign's CPS was $50.
Example 7: Affiliate Marketing Payouts
Scenario: Paying affiliates a commission for each sale they refer.
Known Values: Total Affiliate Payouts = $1200, Sales driven by Affiliates = 60.
Formula: CPS = Total Cost / Number of Sales
Calculation: CPS = $1200 / 60
Result: CPS = $20.00 per sale.
Conclusion: The average cost per sale via the affiliate program was $20.
Example 8: TV Commercial Spend
Scenario: Running a local TV commercial during a sales event.
Known Values: Cost of Ad Slot & Production = $10,000, Estimated Incremental Sales due to TV = 200.
Formula: CPS = Total Cost / Number of Sales
Calculation: CPS = $10,000 / 200
Result: CPS = $50.00 per sale.
Conclusion: The TV commercial resulted in an estimated CPS of $50.
Example 9: Content Marketing Effort
Scenario: Creating blog posts and guides that eventually lead to sales.
Known Values: Cost (staff time, tools) attributed to content = $700, Sales from customers whose first interaction was content = 10.
Formula: CPS = Total Cost / Number of Sales
Calculation: CPS = $700 / 10
Result: CPS = $70.00 per sale.
Conclusion: Content marketing had a CPS of $70 in this specific scenario.
Example 10: Print Ad in a Magazine
Scenario: Placing an advertisement in a relevant industry magazine with a trackable phone number.
Known Values: Cost of Ad Placement = $600, Sales from calls to the trackable number = 3.
Formula: CPS = Total Cost / Number of Sales
Calculation: CPS = $600 / 3
Result: CPS = $200.00 per sale.
Conclusion: The print ad had a CPS of $200.
Frequently Asked Questions about Cost Per Sale
1. What exactly is Cost Per Sale (CPS)?
CPS is a marketing metric that tells you the average amount of money you spend to generate one single sale. It's calculated by dividing the total cost of a marketing effort or campaign by the number of sales that resulted from it.
2. How is CPS calculated?
The calculation is simple: CPS = Total Cost / Number of Sales. You need to attribute the cost and the sales accurately to the specific activity you are measuring.
3. Why is tracking CPS important for my business?
Tracking CPS helps you evaluate the efficiency and profitability of your marketing and sales activities. A lower CPS generally indicates a more cost-effective way to acquire customers through sales.
4. What costs should be included in "Total Cost"?
Total Cost should include all direct expenses associated with the marketing or sales activity you are measuring. This could be ad spend, agency fees, staff time directly attributed to the campaign, cost of materials, etc.
5. What does a high CPS versus a low CPS indicate?
A high CPS means it costs you more to acquire each sale. A low CPS means you are acquiring sales more cheaply. However, what's considered "high" or "low" depends heavily on your industry, profit margins, and business model.
6. What is considered a "good" CPS?
There's no universal "good" CPS. It's only meaningful when compared to your Average Order Value (AOV) and customer Lifetime Value (LTV). Ideally, your CPS should be significantly lower than your profit margin per sale to ensure profitability.
7. Is CPS the same as CPA (Cost Per Acquisition)?
Not always. CPA (Cost Per Acquisition) can refer to the cost of acquiring *any* conversion event, such as a lead, a sign-up, or a download. CPS specifically measures the cost of acquiring a completed *sale* (a paying customer).
8. Can I use this calculator for different marketing channels?
Yes. You can calculate the CPS for individual channels (like Facebook Ads, Google Ads, Email Marketing, etc.) by isolating the cost and the sales specifically generated by that channel.
9. What happens if I have zero sales for a given cost period?
If you incurred a cost but generated zero sales from it, your CPS would be undefined (division by zero). This calculator will show an error in that case, correctly indicating that no sales were achieved relative to the cost.
10. Does the Number of Sales have to be a whole number?
Yes, for this basic calculator, the Number of Sales should be a positive whole number. You either make a sale or you don't; you can't make a fraction of a sale.
