Cost per lead

What it means

CPL, cost per lead, is the cost of acquiring one lead, meaning a potential customer's contact details, for example from a form, an e-book download or a webinar sign-up. It is campaign spend divided by the number of contacts obtained.

The metric is typical of B2B and services, where a contact becomes a customer only after a long sales process. While an online shop measures orders directly through CPA, a consultancy or software firm first needs to know what it costs for someone to get in touch at all.

A low CPL is not a goal in itself. Cheap contacts from a free giveaway rarely turn into customers, while a more expensive lead from a targeted campaign may bring a contract. CPL is therefore paired with the lead-to-deal rate and the cost per qualified lead.

How it works in practice

The offer and the form have the biggest effect on CPL. A valuable lead magnet such as a checklist or calculator and a short form with few fields increase the number of contacts. Each extra required field filters contacts but raises their cost.

Firms sort leads by maturity, typically into MQLs and SQLs, using lead scoring. Tracking the cost per SQL is more useful than raw CPL because it shows what a contact worth a salesperson's time actually costs.

To link CPL to results, web leads must reach the CRM together with their campaign source. Only then can you see which channel brings contacts that sign a contract at the end of the sales funnel and which merely fills the database.

What to watch out for

Every lead is personal data, so collection needs a legal basis under the GDPR, clear information about the purpose and, for marketing e-mails, consent or legitimate interest. Purchased contact lists are risky and their CPL is misleadingly low.

When comparing channels, allow for the time lag: a December lead may only become a customer in spring. Anyone judging campaigns solely on last month's CPL can easily switch off the channel that brings the best but slower-maturing deals.