Cost per lead (CPL) is how much you spend on ads to get one enquiry, such as a form, call or WhatsApp message. For most service businesses it's the single most important Google Ads number.
When a client asks what cost per lead is acceptable, we don't start from industry averages. We start from their numbers: what a customer is worth to them and how many leads they usually close. That gives a ceiling, and we aim to stay well below it.
We also follow up on lead quality with the client every month. A low cost per lead means little if the leads aren't turning into customers.
— Kok Han, Founder, OneStopMaker (Google Partner agency)
Cost per lead = ad spend ÷ number of leads
A Singapore renovation company spends S$3,000 in a month and gets 40 enquiries. Its CPL is S$3,000 ÷ 40 = S$75. In Google Ads, this appears as Cost / conv., as long as conversion tracking is set up and only counts real leads.
It depends on what a customer is worth to you, not on industry averages. Work it out from your own numbers:
Maximum CPL = average profit per customer × close rate
If an average renovation job earns S$4,000 profit and 1 in 5 leads becomes a customer, each lead is worth S$800. A S$75 CPL is excellent. For a business earning S$100 profit per customer with the same close rate, a lead is worth S$20, and S$75 would lose money.
CPL comes from two things: what you pay per click and how many clicks turn into leads.
CPL = cost per click ÷ conversion rate
At S$3 per click and a 4% conversion rate, CPL is S$75. Improve the landing page to 6% and CPL drops to S$50, without paying a cent less per click.
Cost per lead measures enquiries. Cost per acquisition (CPA) usually means the cost of a conversion, which could be a lead or a sale depending on what you track. Track both if you can: a low CPL with leads that never buy isn't a win.
ROAS & Cost per Lead Calculator › Calculate your cost per lead and see whether your ads are profitable.
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