Cost per lead (CPL) is a marketing metric that can be used to determine the efficiency of a company’s advertising campaigns. This metric can also help you monitor individual campaigns and determine your return on investment (ROI).
How is cost per lead calculated?
The cost of a lead is the amount a business pays for each customer it acquires. The metric is commonly used by direct response marketers and brand marketers to track their customer acquisition and retention efforts.
CPL can be measured by dividing the total expenses attributable to an online advertising campaign by the number of leads that are acquired. It is an excellent metric for tracking marketing efficiency and can be easily calculated.
A lead is a prospective customer that has expressed interest in purchasing a company’s products or services, but may not be ready to purchase at the moment. A lead is usually a person who fills out a contact form or gives a phone call and provides their details to receive information from a company.
The cost of acquiring a lead can vary widely depending on the industry and the channel. For example, a business that sells high-value products can afford a higher cost per lead than a company that only offers low-cost products.
The cost per lead is often the first metric a company will look at when determining whether or not to continue investing in a marketing campaign. By comparing a company’s cost per lead to average costs for leads in the same industry, the business can make sure they are generating leads at a reasonable cost.