What is the Cost Per Lead Calculator?

Know your numbers before you set a bid. Enter your revenue goal, average sale value, close rate and the share of revenue or profit you are willing to invest in acquiring a customer. The calculator tells you your maximum allowable cost per customer, target cost per lead, maximum cost per click, and the number of leads, clicks and ad budget needed to hit the goal.

You can also work backwards from your current cost per lead to see whether your campaigns are profitable and how much room you have to grow.

Key features of the Cost Per Lead Calculator

• Target CPL and CPA

  The most you can pay per lead and per new customer.

• Maximum CPC

  Translate your target CPL into a bid ceiling using your conversion rate.

• Goal planner

  Leads, clicks and budget required to reach a revenue or customer goal.

• Profitability check

  Compare your actual CPL against the allowable CPL.

How to use the Cost Per Lead Calculator

1. Set your goal

   Enter a monthly revenue target or number of new customers.

2. Enter your sales numbers

   Average sale value, close rate and gross margin.

3. Choose your acquisition budget

   The percentage of revenue (or gross profit) you will spend to win a customer.

4. Read your targets

   Use the target CPL and max CPC as bid and Smart Bidding goals.

How to calculate allowable cost per lead

Start with what a customer is worth: average sale value multiplied by your gross margin (and by repeat purchases if they are common). Decide how much of that you are willing to spend to win the customer — your allowable cost per acquisition. Multiply it by your close rate to get the allowable cost per lead: if you can spend $300 per customer and close 1 in 4 leads, you can afford $75 per lead.

From cost per lead to maximum CPC

Your maximum CPC is the allowable cost per lead multiplied by your landing page conversion rate. With a $75 target CPL and a 10% conversion rate, you can afford up to $7.50 per click. Improving the conversion rate to 15% raises that ceiling to $11.25, which is why conversion rate optimisation is so powerful in competitive markets.

Pro tips from our PPC and SEO team

• Use your real close rate from your CRM, not a guess.
• Set target CPA in Smart Bidding a little below your allowable CPA.
• Track lead quality, not just lead volume.

Cost Per Lead Calculator: frequently asked questions

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