What is a lead
actually costing you?
Cost per lead on its own tells you very little. What matters is what a lead is worth once it closes — and whether the gap between the two is big enough to be a business.
Your numbers
$
Of the leads you get, how many become customers
$
Over the whole relationship, not one sale
What it means
Cost per lead
—
Spend divided by leads.
Cost to acquire a customer
—
What you pay for one that actually closes.
Value to cost ratio
—
Customer value against what it costs to win them. Under 3:1 is usually a problem.
Monthly gross return
—
Value of customers won, minus the spend that won them.
Average customer value should be the whole relationship, not a single transaction — a customer who buys twice a year for four years is worth eight sales, not one. The 3:1 rule of thumb is a common benchmark, not a law; capital-intensive and long-cycle businesses often run tighter by design.