What is cost per lead?
Cost per lead is marketing spend divided by leads generated. Simple arithmetic, and almost entirely dependent on what you count as a lead. That definitional freedom is why the figure travels so badly between businesses, and why it is so easy to make look good.
Why do quoted cost-per-lead benchmarks mislead?
Count every inbound call including wrong numbers and spam and your cost per lead drops sharply while nothing about the business improves. Count only qualified enquiries that could plausibly become work and the number rises, and becomes useful.
Before comparing your figure to anyone else’s, establish what each one counts. Usually they are not counting the same thing.
What should you measure instead of cost per lead?
Cost per qualified lead, with the qualification rule written down and held constant. Then cost per booked job, which is the number that actually connects to revenue. This is why our reporting uses Qualified Demand, defined with the client at kickoff and then not moved, rather than a raw call count.
| Metric | Spend divided by | How far to trust it |
|---|---|---|
| Cost per lead | Leads generated | Almost entirely dependent on what you count as a lead |
| Cost per qualified lead | Qualified enquiries that could plausibly become work | Useful, with the qualification rule written down and held constant |
| Cost per booked job | Booked jobs | The number that actually connects to revenue |
How do you check your own cost per lead?
Take last month's marketing spend and last month's inbound enquiries, then apply your own qualification rule before dividing. Write the rule down first, so it cannot move.
Now compute it both ways, with and without the unqualified calls. The gap between those two numbers is how much room there is to flatter yourself.
Rankings are never guaranteed. Anything we could not trace to a primary source is absent from this page, not estimated. The audit runs the same six layers described on the pricing page, and Share of Answer is scored quarterly.
See where you actually stand
Free: twelve genuine buying questions for your category, asked across three surfaces.
Get my free Visibility Check