What is Cost per lead?
Cost per lead is the total spend on a channel divided by the number of enquiries it produced — what each new enquiry cost you.
Cost per lead is the total spend on a channel divided by the number of enquiries it produced — what each new enquiry cost you.
Cost per lead, often abbreviated CPL, is usually a more useful number than cost per click for a local business, because it counts something with commercial meaning. Spend $2,000 and get forty enquiries and your CPL is $50, regardless of how many clicks it took to get there.
It is only as good as the definition of a lead. A form submission, a phone call over thirty seconds, a booking and a chat message are all counted as leads by different businesses, and comparing CPL figures without knowing which is being counted is meaningless. Phone calls in particular go untracked in a great many local accounts, which makes their reported CPL far worse than the real one.
The step beyond CPL is cost per booked job, which divides spend by the work actually won. That is the number that determines profitability, and the gap between the two is your close rate — which is frequently where a channel that looks expensive turns out to be a sales problem rather than a marketing one.
It lets you compare channels that behave nothing alike. Paid search, local search and social produce leads at very different costs, and CPL is the common unit that makes the comparison possible.
Not tracking phone calls. In most local categories the majority of leads arrive by phone, and an account that only counts form fills is judging itself on a fraction of what it produced.
Cost per lead is part of paid advertising
Understanding the term is the easy half. The service page describes what the work actually involves, and the free assessment says whether it is the thing your business should be spending on next — which is frequently a different question.
Things that come up alongside it
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