What a Lead Should Cost

Cost per lead is the first number most owners ask about and the last one they should judge a campaign by. It still matters. It tells you whether your money is buying attention or burning off. But a lead price only means something next to the sale it turns into.

Across the campaigns we run, cost per lead lands between $7 and $24. That is a real range from real accounts, and the spread inside it is not random.

Why the range is that wide

Two forces set the floor: how many people in your market want what you sell right now, and how many businesses are bidding for the same attention.

• Urgency. A burst pipe, a toothache or a dead car battery creates its own demand. A remodel, a new wardrobe or a spa day has to go create it, so it takes more impressions to find the same buyer.
• Seasons move the price. Tax help spikes in spring, cooling repair in summer and gifts in December, so the same budget buys a different number of leads in March than it does in October.
• In a crowded market with hundreds of competitors, attention costs more than it does in a niche with a handful.
• A strong offer with a clear next step pulls harder than contact us for more information, and pulling harder is what lowers the price.

What drives your cost per lead up

Most of the time the platform is not the problem. Four things account for nearly every underperforming account we take over.

• Slow follow-up. A lead that sits for an hour is a different lead. Your close rate falls, so you need more leads to make the same revenue, and your real cost per sale climbs even when the dashboard number holds steady.
• A weak landing page. If the ad promises a free consultation and the page opens with your company history, people leave. You paid for that click either way.
• Targeting that is too broad. Paying to be seen by people you cannot serve, ship to or reach is money spent on nobody.
• One creative running for months. Once the same people have seen the same image twenty times, the platform works harder to place it and charges you for the effort.

What good looks like

A healthy account is boring to watch. Cost per lead moves inside a narrow band week to week instead of swinging. Calls and form fills both come in, not just one. The leads name what they want in their own words instead of asking what you do. And when you raise the budget, the cost per lead moves a little rather than doubling.

If you only check one thing each week, check whether the leads are the customers you actually want. A cheap lead for a sale you would rather not make is not cheap.

Track cost per sale, not cost per lead. The second number is only a means to the first.

When a $40 lead is still profitable

Price on its own tells you nothing. Run it against your own math instead.

Say your average sale is nine thousand dollars and you close one in four of the leads you actually speak to. Four leads at $40 each is $160 of ad spend to win nine thousand dollars of business. That is a good trade. Now take a $12 lead for a six hundred dollar sale where you close one in ten. That is $120 in ad spend against six hundred dollars, before your costs. The cheaper lead is the worse deal.

• Know your average sale value by product or service, not as one blended number.
• Know your close rate on leads you reached, not on leads you received.
• Multiply leads needed per sale by cost per lead. That is your real acquisition cost.

When that number sits comfortably under your gross profit per sale, the campaign is doing its work. When it does not, look at follow-up speed and the landing page before you touch the bid. Those two fix more accounts than bidding ever has.

One more habit worth building. Write down the cost per lead you can live with before the campaign launches, not after you see the first week. It keeps you from killing something that was working and from defending something that was not.