Cost per Lead

Advertising used to be judged on clicks alone. Cheap clicks in volume counted as a good campaign.

The problem is that clicks aren't the end for every product. Someone buying for a company doesn't pay on the spot — they submit an enquiry, sales calls them, and a contract closes weeks later. Three thousand clicks producing two enquiries is a failed campaign, and read on cost per click it looks like a success. So the counting point had to move one step past the click.

Divide the spend by the number of leads that arrived in the same period.

1. Pin down what counts as a lead. A lead is someone who left details you can follow up on, and whether you count only work email plus a name, or personal addresses too, moves the figure substantially.
2. Gather the spend. Decide whether it's media cost only or includes production and tooling, then count the same way every month.
3. Divide. Spend $1,500 and get 100 leads and the cost per lead is $15.
4. Write the downstream rates next to it. If half of those 100 answer the phone, a conversation costs $30, and if ten of them sign, a contract cost $150. Without that line, cheap leads look like good leads.

What counts as good is decided by the conversion rates behind it. Twenty leads at $4 each producing no contracts, against five leads at $30 each producing two, makes the cheap side the expensive choice.

So this figure never travels alone. A lead marketing considers promising is an MQL, and one sales considers worth contacting directly is an SQL; channels get compared by putting cost per lead next to the pass rates at both gates. A cheap channel whose leads are almost all filtered out at the first gate is one of the most common findings in this work.

"This channel is at $6 a lead and 5 percent of them answer the phone."

Cheap and plentiful at the top of the funnel, mostly gone by the next step.

"Let's redefine a lead as work email only."

Narrow the counting rule so the comparison means something.

"This quarter we'll read cost per contract rather than cost per lead."

Moving the judgment point further down the line, where the money actually is.

When Ravi compared two channels at Pagedeck, this number alone didn't separate them: one came in at $7 a lead and the other at $27. Sofia attached the call records, and the cheap channel turned out to be mostly individual users while half the expensive one were people evaluating a rollout for their team.