Cost Per Lead CPL

Cost per lead is one small sum. You take everything you spent on getting enquiries last month and divide it by the number you received. Spend four thousand on adverts, get a hundred enquiries, and each one cost you forty. That is the whole calculation, so the argument is never about the maths but about what belongs in the top number.

Most people count only the advertising. The honest version also counts the design work, the person who wrote the adverts, the landing page and the agency's monthly fee. Leave those out and the figure looks about half of what it really is. That is why owners go quiet for a moment the first time they add it up properly.

Here is the part that surprises people, because cheap enquiries are often the expensive ones. A campaign bringing three hundred enquiries at ten each looks better than one bringing forty at sixty. Then a salesperson spends four minutes on every one of those three hundred and finds three real buyers. The smaller campaign found nine, so count the paid hours that went into chasing the rest. The cheap campaign was the costly one, because sales time is money that never arrives as an invoice.

So the number to move up to is cost per paying customer. Divide the same spending by the customers who actually paid, not by the enquiries that arrived. If a hundred enquiries at forty each turn into five customers, every customer cost eight hundred. Set that against what a customer is worth to you over two years. If the customer is worth less, the campaign loses money however cheap each enquiry looked.

Working that out means joining the two ends together, and most companies never do. The advert spending sits on one screen and the paid invoices sit on another. Linkysoft treats that join as part of the digital marketing work, because a report that stops at the enquiry hides the only figure the owner needed.

A small business can start with a spreadsheet and one honest rule. Every enquiry gets its source written beside it the day it arrives, even the ones that came by phone. Once there are more enquiries than a person can type, a web application can carry that source to the paid invoice on its own. Linkysoft builds that trail before anyone touches the adverts, because you cannot improve a number you cannot see.