Lead generation is a crucial marketing metric for your sales team and marketing team. You do a lot of different marketing efforts to get new leads, from display advertising to webinars, and you need to track not only how many quality leads you got, but how much it cost you to get these potential customers.
TRACK YOUR COST PER LEAD!
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Templates using this KPI
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Integrations using this KPI
What is the cost per lead?
The cost per lead is the average cost for each new lead you get in your ad campaign. This lead metric measures how cost-effective your marketing campaigns are so that generating leads is worth the ad spend. Much like CPM or CPC It's also an online advertising pricing model, where the advertiser pays for a sign-up from a potential customer instead of a view or a click.
CPL is not to be confused with these other similar acronyms in digital marketing:
CPA: Cost Per Acquisition
CPC: Cost Per Click
CPM: Cost Per Thousand
CRM: Customer Relationship Management
How do you calculate the cost per lead?
Thecost per leadis a very easymetricto measure. Simply take your totalad spendfor a given period and divide it by thenumber of leadsyou got for the same period.
The cost per lead formula (CPL calculator):
Totalad spend/number of leads=cost per lead
What is a good cost per lead?
It of course depends on your industry, but overall a good cost per lead is just as much (or ideally less) than your gross profit per sale. So if for example getting a sale gives you a total amount of money of 100$ after your total costs and expenses, your cost per lead should be 100$ or under.
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What is a bad cost per lead?
The same calculation goes to know what a bad cost per lead is. You don't want to pay more for a qualified lead than the amount of money that lead will bring to your business. So if each lead costs more than your average gross profit per sale, it's not good.
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Cost per lead KPI examples & templates
See this KPI in action here!
Executive report template
Executive report templateThis template is filled with business metrics your C-suite will want to see. Show them your revenue, new customers, churn rate, and more. You can also add your profit margin, sales expenses, and more.
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Digital marketing report template
Digital marketing report templateFrom SEO to social media and PPC, this report gives you a good view of all your online marketing strategy metrics and overall online performance. Track your Linkedin leads, inbound traffic, and search engine rankings, all in the same place.
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PPC report template
PPC report templateCheck your conversion rate, total sales, sales leads, costs and more, from all your marketing channels. You can also track this data alongside your business metrics and industry benchmark.
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Cost per lead best practices
Here are some of the best practices you should keep in mind to improve yournumber of leadsand have alowercostper lead, no matter what your total marketing budget is.
Use retargeting
Use retargetingMaybe the lead you got did not convert into a paying customer yet, retargeting can help you reach these leads again, and make sure they have the best possible chance of converting.
Optimize your ad campaigns
Optimize your ad campaignsMake sure your Google ads or social media ads are optimized so that your lead won't cost you an arm and a leg. Maybe target less high-volume keywords or ones that the intent is more aligned with your product.
Check performance by device and network
Check performance by device and networkMake sure your ad campaigns are well optimized for different networks and devices. This way you will always get the optimal ad performance.
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Cost Per Lead Synonyms
Although Cost Per Lead is widely used, there are multiple synonyms that can be used. Here are a few :
Cost per qualified lead (CPQL), Cost per marketing qualified lead (CPMQL), Cost per sales qualified lead (CPSQL), Cost per goal completion, Cost per action (CPA), Lead acquisition cost (LAC)
Ressources about cost per lead
Learn to use your CPL in our Help Center
- How to use dashboard templates
- How to add goal conversions data in Google Analytics (Universal) dashboards?
Read about the CPL on our blog
- The Ultimate Guide to Social Media Reporting in 2024
- Metrics Reporting: How to Use it to Level Up Your Marketing
- The Top 5 Advertising and Paid Media KPIs to Track in Your Campaign Dashboard
- Top KPIs for lead generation
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