← All articlesStrategy
What is a good cost per lead? How to judge your own numbers
Every founder asks the same question after their first week of ads: "Is my cost per lead good?" The honest answer is that nobody else's number matters. What matters is what a lead is worth to your business.
The simple formula
Work backwards from what a customer is worth to you:
- Profit per customer. Price minus your costs for one sale (or per month, for a subscription).
- Lead-to-customer rate. Out of every 10 leads, how many actually buy? If 2 buy, that is 20%.
- Break-even cost per lead = profit per customer x lead-to-customer rate.
Example: you earn Rs 5,000 profit per customer and 1 in 5 leads buys. Break-even cost per lead = 5,000 x 0.20 = Rs 1,000. Anything below that makes money. Aim well below it, so you have room to grow.
Why "cheap leads" can be a trap
A Rs 80 lead who never answers the phone is more expensive than a Rs 400 lead who buys. Cost per lead is only half the story. Always look at what happens after the form is filled.
What to track every week
- Spend and number of leads
- Cost per lead
- How many leads you reached within one day
- How many became customers
What to do if your number is too high
Fix things in this order: the offer, then the landing page, then the creative, and only then the audience. Most expensive leads come from a weak offer or a slow follow-up, not from the targeting.
Not sure where your numbers stand? Send us your last 30 days and we will tell you what to fix first.
Ujjawal KumarFounder, Catalyst Ads Co.
Want this done for you?
Get a free audit and a clear plan for the next six weeks.