To work out cost per lead, divide what you spent by the leads you got over the same dates. Spend should include everything the channel really costs, such as ad spend, tools and the time or fees of the people running it, or the figure will look better than the truth.
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The calculation
Cost per lead equals total channel cost divided by leads. If a channel cost a fixed amount and produced a number of leads, dividing the first by the second gives the cost of one. Use matching windows: do not divide a full month of spend by half a month of leads.
Why the lead definition matters
A low cost per lead is only good if the leads are good. A newsletter signup and a demo request are not the same thing. Compare channels by cost per qualified lead, and then by cost per customer, before moving budget.
How it applies to SEO
Organic search has no per-click charge, so CPL is harder to read. Add the cost of content, tools and people over a sensible period and divide by organic leads. It tends to fall as older pages keep earning, which is a reason to judge SEO over months rather than weeks.
Common mistakes
Leaving costs out
Agency fees, tools and staff time belong in the total.
Optimising to the cheapest lead
Cheap leads that never buy raise the true cost of a customer.
Frequently Asked Questions
It depends on deal size and how many leads become customers, so compare it with what a customer is worth rather than with other companies.
CPL stops at the lead. Customer acquisition cost follows the same spend through to a paying customer. Track both.
Keep reading
- Cost Per Acquisition: Cost per acquisition is the ad spend needed to produce one conversion, such as a trial, demo request or purchase, for a given campaign or channel.
- Cost Per Click: Cost per click is what you pay, on average, for each click on an ad: total ad cost divided by the number of clicks it received.
- Lead Generation: Marketing that collects contact details from potential buyers, through forms, sign-ups and offers, so they can be nurtured or passed to sales.
- Lead Scoring: A system that ranks leads by how likely they are to buy, using points or a model based on fit and behavior, so sales works the most promising ones first.
- Ad Assets: Ad assets, formerly called ad extensions, add extra links, text, images or contact options to search ads, making them larger and more useful.
- Ad extensions: Ad extensions, now called assets in Google Ads, add extra information to a search ad such as links, calls and callouts.
- Ad group: An ad group is a set of ads and keywords inside a campaign that share a theme and a landing page.
- Ad scheduling: Ad scheduling controls the days and hours your ads run, or adjusts bids for certain times.
