CPL
Cost per Lead
Quick definition
Cost per lead (CPL) is the average cost of generating one lead, calculated as the cost of the activity divided by the number of leads it produced.
Formula
CPL = Cost of the Activity ÷ Leads Generated
Formula variables
- Cost of the Activity
- The spend on the campaign, channel or programme being measured.
- Leads Generated
- The number of leads that met your definition of a lead during the same period.
Worked example
- Campaign cost
- $2,400
- Leads generated
- 60
2,400 ÷ 60
Result: $40
Each lead cost $40 on average. The figures are illustrative.
How to interpret it
CPL measures the price of a contact, not the value of one. A cheap lead that never becomes a customer costs more than an expensive lead that does.
Follow leads through the funnel with the lead-to-customer rate, and compare the cost of leads with what a customer is worth.
When it is useful
- Comparing the cost of lead generation across channels, offers and forms.
- Setting a lead budget for a campaign.
- Checking whether a change to a form or offer made leads cheaper to win.
Limitations
- The result depends entirely on how a lead is defined; a newsletter signup and a sales demand request are very different events.
- Lead quality is not captured.
- It is closely related to cost per acquisition; the two differ only in which action is counted.
Common mistakes
- Comparing CPL across campaigns that use different lead definitions.
- Optimising for cheap leads at the expense of lead quality.
- Leaving out costs such as creative or tooling inconsistently between periods.