CPL Calculator
Cost per lead is an important metric to track when optimizing your marketing campaigns.It helps you understand how much you're spending to acquire a new customer.
How to Calculate CPL (Cost Per Lead)
CPL (Cost Per Lead) Formula
| Cost Per Lead = | Total Amount Spent |
| Total Attributed Leads |
Here,
- Cost Per Lead: It is the amount spent to get a lead.
- Total Amount Spent: Total amount spent on acquiring leads.
- Total Attributed Leads: Total number of leads acquired.
What Does CPL (Cost Per Lead) Mean?
Cost Per Lead (CPL) is the average cost of generating a lead.
What is an example of a cost per lead?
Imagine you are a marketer for a regional car dealership. Your total marketing budget is $10,000 per month. In the past month, your campaign generated 500 leads, then
| CPL = | $10,000 | = $20 |
| $500 |
Why do you need to calculate the cost per lead?
Knowing your current CPL is important, to assess your campaign performance.
If Current CPL > Desired CPL, then you'll need to find ways to lower your costs or increase the number of leads you're generating.
How to decrease cost per lead?
There are many different ways to decrease your CPL, but some common methods include:
- Create targeted ad campaigns: Focus your spending on the most-likely convertible audiences.
- Use retargeting: Show ads to people who have already visited your website and increase your conversion rate
- Focus on quality: High-quality content and products help convince people the worth of the investment
- Use lead magnets: Offer something valuable in exchange for contact information.
- Use social media: Use the right channels and post interesting and relevant content to your target audience.
- Optimize your website: People stay longer on websites that are easy to navigate.
- Test and track: Always test and track your campaigns to see what is working and what isn’t.
What Is The Desired Cost Per Lead
The desired cost per lead is the CPL you would like to achieve in order to be profitable. To calculate this, you'll must know your:
- Average Selling Price, and
- Desired Profit Margin.
Once you have these numbers, simply perform the following calculation to get your Desired Cost Per Lead
| Desired CPL = | (Average Selling Price) - (Desired Profit Margin) |
| (Current CPL) |
For example, if you want to make a $100 profit and your Average Selling Price is $200 with a current CPL of $25, then
| Desired CPL = | $200 - $100 | = $4 |
| $25 |
How much does an average lead cost?
An average lead cost cannot be determined as it varies greatly depending on your industry, target market, and competition. It can vary from $30 to $250 and above.
