Free tool
Cost per lead calculator
What you spent and the enquiries it produced, into a cost per lead and a cost per customer. Then the figure the averages never give you: the most a lead can cost before the customers it produces stop paying for it, from your own close rate and what a customer is worth. Nothing you type leaves your browser.
Leads from search are the ones with no bill per click, which is what our SEO services produce.
What a lead costs, and what it can cost
- Cost per lead
- 40.00
- Close rate
- 20%
- Cost per customer
- 200.00
- Most a lead can cost
- 180.00
The ceiling is yours, and no average can give it to you
Spend divided by leads is the cost per lead, and on its own it says almost nothing. Every page on this subject then quotes an average by industry, and the averages disagree with one another, because a lead is not the same thing twice: a form from someone comparing five quotes and a call from someone whose boiler has failed are both one lead. The figure that decides whether a channel pays is the one this page computes instead: what a customer is worth, multiplied by the share of leads that become customers. That is the most a lead can cost before the customers it produces stop covering it.
Cost per customer is the same sum from the other side, spend divided by the customers won, and it is the figure to trust when the two disagree. A channel producing cheap leads that rarely buy is dearer than one producing expensive leads that usually do, and only the cost per customer shows it. Directory enquiries and search enquiries often differ exactly this way, which is why the form asks for one channel at a time.
Two figures move the ceiling and the spend is neither of them. The close rate moves it directly: closing three leads in ten instead of two raises what a lead can cost by half. What a customer is worth moves it too, and the first sale usually understates it; a customer who comes back is worth their lifetime gross profit, which the lifetime value calculator works out.
Counting leads honestly
Count from the phone log and the inbox for the period, not from the analytics, which miss most calls and count a form twice when someone resubmits. Count enquiries from people who could buy: a call from a supplier is not a lead and neither is a job applicant. Use the same period for the spend, the leads and the customers, and give a channel a quarter rather than a week before judging it, because customers close weeks after they enquire and a short window flatters cheap leads that never buy.
The figures on either side of this one
What a customer is worth over their whole time with you comes from the customer lifetime value calculator, and it usually raises the ceiling. For paid search the CPC calculator turns a cost per click into a cost per enquiry, and the conversion rate calculator says whether the leads are a visits problem or a page problem.
Questions about cost per lead
What counts as a lead?
An enquiry from someone who could become a customer: a call, a form, a message, a quote request. Count the ones a person actually followed up, and count them from the phone log and the inbox rather than from the analytics, which miss calls and double-count forms. A visit is not a lead and a newsletter sign-up is only a lead if those people go on to buy.
Where do the figures come from?
The spend is what a channel cost in the period: the advertising bill, the directory fee, the agency invoice. The leads are the enquiries that channel produced in the same period, and the customers are the ones among them who bought. What a customer is worth is either the average first sale or, better, the lifetime gross profit from the lifetime value calculator, which is what the spend is really buying.
What is a good cost per lead?
There is no good cost per lead in general. The published averages by industry disagree with each other because a lead is not the same thing twice, and a figure that is cheap for a roofer is ruinous for a florist. The ceiling is your own: what a customer is worth multiplied by the share of leads that become customers. Below that the leads pay; above it they do not, however cheap they look next to an average.
Cost per lead or cost per customer?
Cost per customer, when the two disagree. A channel that produces cheap leads that rarely buy is more expensive than one that produces dear leads that usually do, and only the cost per customer shows it. The page shows both so the difference is visible.
Is anything I type here sent anywhere?
No. Everything happens in your browser. There is no form submission, no analytics event and no network request of any kind, which you can confirm in your browser’s network tab.
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