Cost Per Gross Addition - CPGA

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DEFINITION of 'Cost Per Gross Addition - CPGA'

A ratio used to quantify the costs of acquiring one new customer to a business. Often, the CPGA ratio is used by companies that offer subscription services to clients, such as wireless communication companies and satellite radio companies.

Cost Per Gross Addition (CPGA)

INVESTOPEDIA EXPLAINS 'Cost Per Gross Addition - CPGA'

These companies often will compare their own CPGA values with competing companies to compare who is better able to attract new customers at a lower cost.

Investors will look to compare a company's CPGA over a reporting period, either quarter on quarter, or year over year. Specifically investors will be looking to see if the number is decreasing over these periods. If it is, this could be a sign that the company attracting more customers for the same level of cost or it may show that the company is reducing its costs while attracting the same amount of customers.

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