What is a Cost per Lead?

Ruben Buijs

Founder & Digital Consultant

Written on Jul 31, 2023

1 minutes

Lead generation

Cost per Lead (CPL) is a crucial metric in lead generation that measures the average cost of acquiring a single lead for a business. It allows marketers to evaluate the effectiveness and efficiency of their lead generation campaigns. CPL is calculated by dividing the total cost of generating leads by the number of leads generated within a specific time period.


Let's say a company spends $1,000 on a digital marketing campaign, which generates 200 leads. To calculate the CPL, you divide $1,000 by 200, resulting in a cost per lead of $5.


Understanding the cost per lead is essential for businesses to determine the profitability of their lead generation efforts. By analyzing the CPL, companies can evaluate the performance of different marketing channels, campaigns, or strategies. It helps identify which channels or campaigns are delivering leads at a lower cost and generating a higher return on investment (ROI).

How to Use It

To make the most of the cost per lead metric, follow these steps:

  1. Set clear goals: Establish specific lead generation objectives to measure the success of your campaigns accurately.
  2. Track expenses: Keep a record of all costs associated with your lead generation efforts, including advertising spend, marketing software, and staff salaries.
  3. Track leads: Implement a robust lead tracking system to monitor the number of leads generated from each campaign or channel.
  4. Calculate CPL: Divide the total cost by the number of leads generated to calculate the CPL for each campaign or channel.
  5. Analyze and optimize: Regularly analyze the CPL to identify the most cost-effective strategies and areas for improvement. Adjust your marketing efforts accordingly to maximize lead generation efficiency.

Useful Tips

Here are some useful tips to help you optimize your cost per lead:

  • Targeted Audience: Focus on attracting and engaging with your target audience to increase the chances of generating high-quality leads.
  • Conversion Rate Optimization: Continuously optimize your landing pages and conversion funnels to improve the conversion rates and ultimately reduce the cost per lead.
  • Lead Nurturing: Implement effective lead nurturing strategies to build relationships with prospects and increase the likelihood of converting them into customers.
  • A/B Testing: Experiment with different ad copies, visuals, and landing page designs to identify the most effective combinations that drive higher conversion rates and lower CPL.


Cost per Lead (CPL) is a marketing metric that measures the cost incurred in acquiring a lead or potential customer for a specific product or service.
Cost per Lead is calculated by dividing the total cost of a marketing campaign or advertising effort by the total number of leads generated during that period.
Cost per Lead is important because it helps businesses evaluate the effectiveness and efficiency of their marketing campaigns. It allows them to assess the cost-effectiveness of lead generation strategies and make informed decisions about resource allocation.
Several factors can influence Cost per Lead, including the target audience, marketing channels used, campaign budget, ad design and messaging, landing page quality, and overall market competition.
Businesses can reduce their Cost per Lead by optimizing their marketing campaigns, targeting the right audience, improving landing page conversion rates, utilizing cost-effective marketing channels, and constantly analyzing and refining their lead generation strategies.
Not necessarily. While a lower Cost per Lead is generally desirable, it's important to consider lead quality and conversion rates. Generating a large number of low-quality leads may not be beneficial if they don't convert into paying customers.
Some common strategies to improve Cost per Lead include optimizing ad targeting, creating compelling and relevant ad content, using A/B testing to refine campaign elements, implementing lead nurturing campaigns, and leveraging marketing automation tools.
Yes, Cost per Lead can vary significantly across different marketing channels. Some channels may be more cost-effective in generating leads compared to others, depending on the target audience and industry.
Businesses can track their Cost per Lead by utilizing tracking and analytics tools. These tools enable businesses to monitor and measure the performance of their marketing campaigns, track lead sources, and calculate the cost associated with each lead generated.
Industry benchmarks for Cost per Lead can vary depending on the industry, target audience, and marketing channels used. It's advisable to research and compare benchmarks specific to your industry to gain a better understanding of what is considered a good Cost per Lead.

Article by

Ruben Buijs

Ruben, the founder of Boei, leverages over a decade of consultancy experience at Ernst & Young to optimize lead generation. Boei specializes in converting website visitors into qualified leads. Outside of work, Ruben is passionate about crossfit and enjoys gaming occasionally.

Table of contents

  1. Examples
  2. Importance
  3. How to Use It
  4. Useful Tips
  5. Related Terms

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