Easily Calculate Cost-Per-Lead (CPL) for Your Business

Is your spending on lead even justified? Knowing CPL gives you clearer picture on how much you should spend on lead acquisition

One performance indicator that would be worth noting is the Cost-Per-Lead (CPL). CPL assesses the cost of generating a new lead, and knowing how to determine it properly can enhance your marketing approach and financial allocation.

Here, we’ll walk you through how to calculate the cost per lead and the importance of a cost per lead in your business.
What is Cost-Per-Lead (CPL)?
Cost-Per-Lead (CPL) is the cost incurred per each additional potential new customer or participant in any activity that a marketing campaign can support. This metric is greatly beneficial to the organization as it allows them to measure the level of success in the generation of leads and the effective distribution of budgetary funds. Once you know Peer-Group Cost per Lead (CPL) you can determine which channels work very well and which need to be improved.

How to Calculate CPL?
Calculating CPL is not difficult at all. You require two essential pieces of information which are the complete cost incurred while running the marketing campaign and the overall number of leads that were affected.

Here’s the formula:

CPL=Total Cost of Campaign/ Total Number of Leads

Let’s break this down with an example.

Example:

Let us take an instance, where you say you put in $5,000 on a digital marketing campaign. You found 500 leads during this campaign period. For your CPL calculation, you may apply the following approach:

CPL + 5000/ 500 = 10

Assuming that you use that approach and costs are fixed, your Cost-Per-Lead is 10 dollars. This translates to the fact that during the said campaign, 10 dollars was spent on average to get 1 lead. Also, do not get confused between CPL and CAC;


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