When you’re looking to attract customers to your business, marketing campaigns represent an essential part of the process.

The question is, how can you tell if your marketing efforts are delivering what you intended at the start? Well, there are a bunch of metrics that can be measured to determine your success, with one being cost per lead (CPL).

Here we take a closer look at what cost per lead means and why it’s an important part of any marketing campaign you run.

So, What Does Cost Per Lead Mean?

The answer to this question is quite a simple one, as it’s essentially what it sounds like. In terms of lead generation, the term relates to the cost required to generate a new prospect.

Your CPL figure tells your sales team whether the campaign budget is being spent in the right areas, so they can take steps to refine it if necessary.

Don’t Confuse Cost Per Lead With Other Terms

If, when compared to your competitors, your lead formula cost is on the high side, it suggests that you’re not being as efficient in your approach as you could be.

Not to be confused with similar terms like Cost-per-click (CPC) and Cost-per-action (CPA), your CPL is a figure that relates to the revenue spent to get them to take the required action e.g. give over their information for a freebie or more info.

How to Work Out Your Cost Per Lead

Ok, so when you’re looking for your magic cost per lead figure, working it out is a fairly simple process. All that’s required is for you to take the total figure spent on your marketing efforts and divide it by the leads acquired.

It might go something like this…

Cost of marketing campaign – $5,000

Quality leads generated – 500

Cost per lead (5000 divided by 500) = $10

When carrying out this calculation, you need to separate out the figures for each of your marketing channels to get a cost per lead figure for each one. You see, bunching everything together will limit insight into your lead generation performance.

Why Cost Per Lead Is Important

Of course, there are many other metrics that need to be tracked in order to properly gauge how things are going in terms of lead generation efficiency.

However, without cost per lead information, the task of setting sales goals, working out your ROI and determining the correct budgets for your lead generation campaigns is going to be tricky.

CPL figures set the benchmark and from there, you can use the insight to direct your actions from then on. New leads need to be generated, that’s a given, but the lead cost needs to be controlled or you may end up overspending on your marketing campaigns.

Pay For Your New Leads the Cost-effective Way With LeadFellow

As we can see, cost per lead matters and traditionally speaking that cost needs to be paid prior to any sale – meaning you’re out of pocket until sales come in.

Wouldn’t it be better if you only paid this cost for leads that converted? Well, that’s exactly what you get with Leadfellow, as with us, you only pay your cost per lead once it has been converted into a paying customer. Not bad, right?

That’s not all you get with LeadFellow either, as we provide a service that offers free leads, as well as an ability to monetize customer referrals and chance encounters.



Q: What is Cost Per Lead (CPL)?
A: Cost Per Lead (CPL) is a metric used in digital marketing to measure the cost of acquiring a potential customer’s contact information, typically in the form of an email address or phone number.

Q: How is Cost Per Lead calculated?
A: Cost Per Lead is calculated by dividing the total cost of a marketing campaign by the number of leads generated. For example, if a campaign costs $1,000 and generates 100 leads, the Cost Per Lead would be $10.

Q: Why is Cost Per Lead important?
A: Cost Per Lead is important because it allows marketers to measure the effectiveness and efficiency of their marketing campaigns. By tracking the Cost Per Lead, marketers can determine which campaigns are generating the most leads at the lowest cost and adjust their strategies accordingly.

Q: What factors can affect Cost Per Lead?
A: The factors that can affect Cost Per Lead include the type of marketing campaign, the target audience, the quality of the lead, and the competition in the market.

Q: How can I reduce my Cost Per Lead?
A: There are several strategies that can help reduce Cost Per Lead, such as optimizing landing pages, targeting the right audience, using compelling calls-to-action, improving ad relevance, and testing different ad formats and placements.

Q: Is a low Cost Per Lead always better?
A: Not necessarily. While a low Cost Per Lead is desirable, it’s important to also consider the quality of the leads generated. A high volume of low-quality leads may not be as valuable as a smaller number of high-quality leads, even if the Cost Per Lead is higher.


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