What is the ideal cost of a lead?
Posted: Tue Jan 21, 2025 5:59 am
Those who work with Digital Marketing and lead acquisition often ask themselves: “How much are you paying for your leads?” or “What is the ideal cost of a lead?” In this article, you will learn more about the subject, and you will also be able to watch a video made by the CEO of Agência Mestre, Fabio Ricotta.
We already know that Leads are those contacts who have already shown some interest in your company's product or service. But how much did your company spend to get this contact? That's where Cost per Lead (CPL) or Cost per Qualified Lead comes in.
CPL is nothing more than a calculation that allows you to know how much each lead acquired cost the company, simply by dividing what was invested in digital marketing by the number of leads generated by each traffic source.
The great advantage of doing this calculation is that you have all the numbers at hand that can help you make better decisions for the growth of your business. Being able to measure investments and the returns they are bringing to your company is empowering.
Why calculate Cost Per Qualified Lead?
Whether you are a freelancer, agency owner or entrepreneur honduras whatsapp data looking to hire digital marketing services for your business, there are several strategies that can be implemented, such as persona studies, content creation, SEO-focused website optimization, paid media and others. However, some leads are not an ideal fit.
CPL answers these questions to solve them. What strategy is not attracting leads or, if it is, are the leads poorly qualified? By understanding CPL, you can know if your strategies need to be changed.
What is Cost Per Lead (CPL)?
In a way, we can look at this as a very specific issue. First of all, there are other metrics that work together with CPL and help you monitor your business' investment and return metrics. They are:
CPC (Cost Per Click): average cost of how many clicks a sponsored campaign received. It is calculated as follows: CPC = Investment Value / Number of Clicks;
LPV (Lead per Sale): by calculating Number of Leads / Number of Sales you obtain the number of leads needed for a conversion/sale to occur.;
CPV (Cost per Sale): is the value of CPL and LPV combined (without including the cost of the sales team, production, etc.). It is calculated as follows: Cost Per Lead (CPL) x Lead Per Sale (LPV).
Although the results of the calculations are useful, their analysis to conclude whether they are good or bad depends on a few points. In other words, there is no right or ideal result.
There is a saying that goes: “don’t compare your backstage with other people’s stage.” In other words, the cost per lead is something that varies greatly from business to business and also depending on the strategy you adopt.
When you try to compare your results with someone else's, you may end up making the wrong analysis. For example, if someone has a cost of R$0.50 per lead in an e-book promotion campaign, it doesn't mean that their result is better than someone who has a cost of R$1.00.
What should I consider to know if my cost per lead is good?
The truth is that we cannot base ourselves solely on value to say that the cost per lead is “too expensive”.
The important thing is to break down the math of your business. Basically, you need to identify how many leads you need to make a sale. From there, you need to know what your profit margin is, to get the ceiling, that is, the highest amount you can pay for a lead, while still making the desired profit.
We already know that Leads are those contacts who have already shown some interest in your company's product or service. But how much did your company spend to get this contact? That's where Cost per Lead (CPL) or Cost per Qualified Lead comes in.
CPL is nothing more than a calculation that allows you to know how much each lead acquired cost the company, simply by dividing what was invested in digital marketing by the number of leads generated by each traffic source.
The great advantage of doing this calculation is that you have all the numbers at hand that can help you make better decisions for the growth of your business. Being able to measure investments and the returns they are bringing to your company is empowering.
Why calculate Cost Per Qualified Lead?
Whether you are a freelancer, agency owner or entrepreneur honduras whatsapp data looking to hire digital marketing services for your business, there are several strategies that can be implemented, such as persona studies, content creation, SEO-focused website optimization, paid media and others. However, some leads are not an ideal fit.
CPL answers these questions to solve them. What strategy is not attracting leads or, if it is, are the leads poorly qualified? By understanding CPL, you can know if your strategies need to be changed.
What is Cost Per Lead (CPL)?
In a way, we can look at this as a very specific issue. First of all, there are other metrics that work together with CPL and help you monitor your business' investment and return metrics. They are:
CPC (Cost Per Click): average cost of how many clicks a sponsored campaign received. It is calculated as follows: CPC = Investment Value / Number of Clicks;
LPV (Lead per Sale): by calculating Number of Leads / Number of Sales you obtain the number of leads needed for a conversion/sale to occur.;
CPV (Cost per Sale): is the value of CPL and LPV combined (without including the cost of the sales team, production, etc.). It is calculated as follows: Cost Per Lead (CPL) x Lead Per Sale (LPV).
Although the results of the calculations are useful, their analysis to conclude whether they are good or bad depends on a few points. In other words, there is no right or ideal result.
There is a saying that goes: “don’t compare your backstage with other people’s stage.” In other words, the cost per lead is something that varies greatly from business to business and also depending on the strategy you adopt.
When you try to compare your results with someone else's, you may end up making the wrong analysis. For example, if someone has a cost of R$0.50 per lead in an e-book promotion campaign, it doesn't mean that their result is better than someone who has a cost of R$1.00.
What should I consider to know if my cost per lead is good?
The truth is that we cannot base ourselves solely on value to say that the cost per lead is “too expensive”.
The important thing is to break down the math of your business. Basically, you need to identify how many leads you need to make a sale. From there, you need to know what your profit margin is, to get the ceiling, that is, the highest amount you can pay for a lead, while still making the desired profit.