A low cost per lead can still be expensive
Cost per lead is easy to measure and easy to celebrate. It can also hide the fact that cheap leads rarely become customers.
The comforting metric
Cost per lead is one of the most quoted numbers in marketing, because it is simple and it usually looks like progress. Drive it down and it feels like the work is paying off. But a lead is only a promise of a customer, and the price of the promise tells you very little about whether it will be kept.
Cheap leads, expensive customers
The cheapest leads are often cheap for a reason: they are less qualified, less ready, or less likely to buy. A campaign can halve its cost per lead and quietly double the number of leads that go nowhere. The saving on the surface is paid for many times over in wasted time chasing enquiries that were never going to convert.
Cost per sale is the honest number
The metric that actually matters is what it costs to win a customer, not what it costs to collect an enquiry. Two channels can produce leads at the same price while one delivers customers at half the cost of the other. Until leads are connected to the sales they eventually become, cost per lead is a number you can celebrate all the way to a worse result.
Optimise for value, not volume
The aim is not the most leads or the cheapest leads, but the most profitable customers for the money spent. That means judging channels and campaigns by the revenue and margin they ultimately produce, and being willing to pay more per lead where those leads are worth far more. Measured properly, an expensive lead is often the cheapest customer you will find.
Think this might apply to you?
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