Cost per lead is a popular metric in marketing. The average cost per lead provides insight into the ratio of total spending on all marketing activities to the total number of leads generated.
To calculate the cost per lead, do the following: Divide the total cost spent in euros by the number of leads. Here’s how that would look in an example with specific numbers. If you invest €1,000 in a PPC campaign and ten users provide their contact information—that is, convert—your cost per lead is €100. Cost per lead = €1,000 / 10 = €100
To put it simply, you can think of the calculation like this:
Calculating the cost per lead is a good metric. However, we recommend examining this in detail and factoring in relevance as an additional dimension.
Together with your sales colleague, you’ll ultimately focus on identifying which leads were truly relevant.
If you want to figure out how to effectively generate sales-qualified leads, you’ll need to focus on other metrics as well. A useful metric for this would be, for example, cost per sales opportunity, but more on that later.
Before doing so, you should take a look at the cost-to-relevance ratio for each channel. It’s not always just one channel that leads to a contact; often, it’s a combination of several. If you need help with the evaluation, feel free to reach out to our specialists. After all, high relevance goes hand in hand with a high conversion rate from leads to sales opportunities.
Ultimately, the majority of your sales staff probably won’t ask you how you went about generating leads. However, they will ask how many sales opportunities have come from leads generated through the various channels and what your cost per lead or per sales opportunity is.
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- Your current cost per lead
- Conversion Potential
- Recommendations for Action
But what is the average cost per lead?
Depending on the industry and the product or service, a lead costs between €50 and €400.
The 2017 Demand Generation Benchmarks Report lists the cost per lead (CPL).
hoch | mittel | niedrig | |
Stichprobenumfang | 234 | 129 | 38 |
1 - 10 € | 3 % | 15 % | 26 % |
11 - 24 € | 8 % | 15 % | 11 % |
25 - 47 € | 13 % | 8 % | 13 % |
48 - 94 € | 14 % | 18 % | 3 % |
95 - 234 € | 28 % | 6 % | 8 % |
235 - 467 € | 17 % | 6 % | 8 % |
468 - 934 € | 6 % | 3 % | 0 % |
935+ € | 4 % | 5 % | 0 % |
Ich weiß es nicht | 8 % | 25 % | 34 % |
Durchschnitt | 216,28 € | 153,79 € | 62,37 € |
What is the average COST PER LEAD for your company/division?
Here are the average costs per lead, according to HubSpot, broken down by business unit:
IT & Services | € 350 |
Gesundheitswesen & Medizin | € 270 |
Finanzdienstleistungen | € 257 |
Industrie & Fertigung | € 222 |
Medien & Verlagswesen | € 180 |
Konsumgüter | € 172 |
Marketing-Agenturen | € 164 |
Bildung | € 62 |
Non-Profit | € 40 |
In the IT and Services sector, the cost per lead is the highest, while in the nonprofit sector, it is the lowest. As the Generation Benchmark Report shows, there is room for improvement. For example, even in the IT & Services sector, the cost per lead can be reduced to the “low” range with the right measures.
One-third of companies that fail to meet their goals do not know their average lead costs.
And what is your cost per lead?
If you want to determine how much your own cost per lead is, take a look at the following chart. To do this, simply divide the total amount invested by the number of leads; this will give you the cost per lead.
Among your most expensive leads are certainly event leads—such as trade show leads—if you organize these events. For a trade show lead, you can expect an average cost of €1,000 to €2,000 per lead in the B2B sector. This also depends heavily on what is counted as a lead. The figure above refers to genuine prospects.
Outbound leads fall into the mid-range cost category. If you’re actively looking for customers, a lead will cost you approximately €150–250. The chart shows that leads become less expensive the more you focus your marketing on inbound activities. By using content strategies that offer added value to your readers, you can capture their interest.
Relevant content should address the challenges and questions your personas face. Only then will it capture your readers’ attention. Nevertheless, you shouldn’t forget that inbound marketing strategies don’t produce immediate results. Anything that’s meant to be successful in the long term may require time and resources.
However, that doesn’t mean you should stop generating leads on all other platforms. On the contrary: the goal of optimization is to lower your total cost per lead. So it might be worth considering investing more money in inbound and outbound marketing efforts and perhaps less in events.
To do this, however, you should be more involved in the trade shows you organize. Specifically, this means that “after the trade show is before the trade show.” Plan carefully not only how you’ll promote the trade show in advance, but also how you’ll continue to engage people you spoke with at the event by providing them with interesting content.
The goal is to convert these individuals into sales opportunities, for example, through automated lead nurturing.
With these kinds of automated measures, we have successfully reduced the cost per qualified lead in recent years while simultaneously increasing the number of leads. For example, over the course of two years, we were able to increase the number of leads for one of our clients sixfold and cut the cost per lead in half.
What is another useful metric?
Generating a lead, however, is only the first step. You won’t know your full track record until you look at the conversion rates of your leads into sales opportunities and closed deals.
So you’ve now reached the point where you can measure another metric that provides even more insight:
Cost per Sales Opportunity
You can calculate this metric using the following formula:
To determine how efficient each channel is, “cost per sales opportunity” is the most useful metric. This requires that you track your costs, as well as your leads and sales opportunities.
Align your marketing with “cost per sales opportunity”
While comparing costs per lead is useful and practical, you should base your marketing strategy on “cost per sales opportunity.” Create a list of sales opportunities by channel and divide your costs by the number of new customers you’ve generated through each channel.
If you find this manual process too tedious, it’s best to set up marketing automation software. It provides real-time data from all platforms.
Not sure where to start? No problem. During a free initial consultation, we’ll explain how you can use HubSpot to set up tracking for the costs per sales opportunity across all platforms. Curious? – Contact us.
Conclusion: Is 100:1 or 50:5 better?
Your cost per lead varies depending on the platform and can differ significantly. That’s why you should also consider the additional metric “cost per sales opportunity.” After all, what really matters is whether a lead turned into a sales opportunity and, ultimately, a customer.
Because let’s be honest: Would you rather have 100 leads and one sales opportunity, or 50 leads and five sales opportunities? I’m sure we can all agree that, at the same cost, more sales opportunities are better.
