Cost Per Lead (CPL).

What is cost per lead?

Cost per lead (CPL) is the amount you spend on a marketing channel or campaign divided by the number of leads it produces. If a campaign costs £1,500 in a month and generates 30 enquiries, the CPL is £50.

A lead is usually a form submission, call or booking from someone who might buy, so how you define a lead changes the number as much as how you spend.

Why it matters

CPL turns marketing spend into something a finance director can judge. Once you know what a lead costs, and roughly how many leads become customers, you can work out what each new customer costs to win and whether a channel pays for itself. It also lets you compare very different activities, such as paid search, LinkedIn ads and a trade show stand, on the same terms.

What moves it

• Loose targeting Showing ads to people with no need for your service raises spend without adding leads.
• Landing page conversion A page that converts twice as many visitors halves your CPL at the same ad spend.
• Local competition In crowded markets such as legal services or emergency trades, click prices run high and CPL follows.
• Lead definition Counting newsletter sign-ups as leads makes CPL look cheap. Counting only qualified enquiries makes it look dearer, and far more honest.

What to do about it

Agree with whoever handles sales what counts as a qualified lead, and write it down. Record every enquiry's source, then mark each one as qualified or not in your CRM, or even a simple spreadsheet. After a month, calculate CPL and cost per qualified lead for each channel side by side. Where the two numbers diverge sharply, look at targeting, keywords and form questions before you touch the budget.