What is Cost Per Lead (CPL)?

You roll up your sleeves and start making your plans for your next campaign. It comes time to make a recommendation on budget and with which media partners to spend money to promote your campaign. Which placement do you choose? Do you recommend to your boss that you book the $5,000 email, the $3,000 email—or both?

Cost per lead (CPL) is a metric that can help you both on the front end of campaign planning and when the campaign ends to evaluate success. Let’s dive in!

How do you calculate CPL?

CPL = The spend for your media placement/ how many leads you converted

For every industry a “good” CPL is different. The cost per lead is also dependent upon if you are trying to convert marketing qualified leads (MQLs) or sales qualified leads (SQLs).

MQLs cost less because they’re more top of funnel, and SQLs cost more because they are leads with higher buying intent.

Why is CPL important?

A whole bunch of reasons…

1. It levels the playing field.
   If you evaluate the performance of your media channels based on the CPL it shows you which media placements are the highest quality. If you really have your funnel working like a finely tuned machine you should be able to track these leads all the way through the sales process to also determine which media channels resulted in the most revenue. Instead of wondering if the $3,000 email or the $5,000 email was the right one for you—CPL will show you the answer, very clearly.

2. It can help you establish a campaign budget.
   If you know you’re targeting 200 MQLs and your historic data shows you that you convert leads at approximately $25/ lead then you can quickly do the math to decide that your media budget needs to be around $5,000 (200 x $25).

3. It can help you watch trends.
   If you track CPL on all of your campaigns you can quickly spot trends such as changes in which media channel is most popular, you can glean information about which content the market is liking best, and you can see when CPL is either trending up or down based on your historic data.

4. It’s an objective way to measure campaign success.
   We’ve all been in that meeting where someone says the campaign went well because they subjectively felt it was good. Eeehhhhht. CPL removes this problem.

5. It can help identify weaknesses in the sales/ marketing process.
   Generally all metric tracking is good to identify where there are problems in the sales/marketing process. CPL is no different. Using CPL, MQL, and SQL data we can establish target conversion percentages of leads at each step of the funnel to identify gaps and make improvements.

How to get started calculating CPL.

If you’ve been tracking your conversions by channel you can easily find your historic CPL by dividing the amount spent by channel by the number of leads you generated.

If you’ve not been tracking your spend, or your lead conversions by channel—that’s where you’ll want to start. Create separate conversion landing pages to hone in on where your leads are coming from you can find out how much they are really costing you.

Creating CPL benchmarks.

Once you’ve been tracking CPL by media partner and marketing channel for awhile you’ll be able to create internal benchmarks. We’ve got some for the veterinary industry based on our almost 4 years of data—if you want to know them reach out to us, we’re happy to share!

Looking to up your veterinary marketing game? 

Red Brick Partners, a veterinary marketing agency with over 14 years of B2B and B2C veterinary marketing experience can help. Whether you are searching for ways to generate leads, automate sales and marketing processes, or boost awareness, we’ve got you! Discover how we help our clients.