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  3. How To Calculate “Cost Per Lead”

How To Calculate “Cost Per Lead”

Understanding your cost per lead is important when planning your business.

The very first step to understanding your cost per lead is making sure you know where¬†all of your leads are coming from. We’ll talk more about that in a future article.

To calculate your cost per lead, you simply need to take the total amount of money you’ve spent and divide by the numbers of leads you’ve received.

So if you’ve spent $50 on Facebook Advertising and that advertising generated 10 leads, you would divide $50 by 10 and quickly learn your cost per lead is $5.

Important

With any type of calculation, the more data you can use, the more accurate your numbers are. If you’ve only spent $50 on advertising, feel free to use that to calculate cost per lead. But if you’ve been advertising for 6 months, using all 6 months of data produces a more accurate number.

Lastly, it’s important to remember that each one of your lead generation sources will have different costs per lead. For example, Facebook advertising will have a different cost per lead than leads generated from a third party Zillow.

Important

Cost per lead might also be referred to “conversion cost

Updated on August 3, 2020

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