Marketing
Cost per lead (CPL)
Cost per lead is the average amount spent on marketing to generate one new lead in a period.
CPL = Marketing spend ÷ New leads
Worked example
| Google Ads and Facebook Ads spend for the month | $15,000 |
| New leads for the month | 300 |
$15,000 ÷ 300 = $50 per lead
Why it matters
CPL shows what it costs to fill the top of the funnel and lets you compare channels on a like-for-like basis. Combined with how many leads become customers, it tells you what a new customer really costs.
Common mistakes
Where it misleads
Counting duplicate, spam or unqualified leads, which makes CPL look lower than it is.
Picking channels on CPL alone: a $30 lead that never buys costs more than a $90 lead that does.
Leaving agency fees and software out of spend, so the true cost of each lead is understated.
Related terms
Keep reading
- Customer acquisition cost (CAC)Customer acquisition cost is the average sales and marketing spend needed to win one new customer.
- Return on ad spend (ROAS)Return on ad spend is the revenue earned for every dollar spent on advertising.
- Marketing efficiency ratio (MER)Marketing efficiency ratio is total revenue divided by total marketing spend: a blended view of what all marketing returns, without relying on attribution.
Stop calculating it by hand.
Dear CFO keeps your statements, forecasts and metrics current from the systems you already run.