Cost per lead (CPL) is the average amount you spend to get one enquiry, such as a form submission, a phone call or a booking request. If a building firm spends £1,800 on Google Ads in a month and receives 45 enquiries from it, its CPL is £40.
How cost per lead works
The formula is spend divided by leads. The hard part is agreeing what counts as a lead. A sensible definition might be a completed contact form, a call from an ad that lasts more than a minute, a WhatsApp chat that starts from the site, or a quote request. Newsletter sign-ups and brochure downloads are usually tracked separately, because they are a step earlier.
You can measure CPL per campaign, per channel or across all marketing (a blended CPL). You can also choose between media CPL, which counts only ad spend, and fully loaded CPL, which adds management fees, landing page tools and call tracking. Both are useful as long as you know which one you are looking at. For VAT-registered businesses, use ad spend excluding VAT so the figure matches your accounts.
Platforms count leads differently, too. Meta counts each submitted instant form as a lead, while Google Ads counts whichever conversion actions you have set as primary, which may include calls of any length unless you set a minimum duration. Check those settings before comparing CPL between the two.
Why it matters
CPL is useful because it is fast. Leads arrive within days of a change, while sales can take weeks or months to close, so CPL is often the first sign that a campaign is improving or slipping.
On its own, though, it misleads. Compare two campaigns. Campaign A has a £40 CPL and a quarter of its leads become customers, so each customer costs £160. Campaign B has a £25 CPL but only 8% of its leads buy, so each customer costs £312.50. The “cheaper” campaign is nearly twice as expensive where it counts. That is why CPL has to be read alongside lead-to-customer rate and, in the end, customer acquisition cost.
To set a target, work backwards. If a new client is worth £1,200 in contribution and one lead in five becomes a client, each lead is worth about £240 to you. A CPL comfortably below that leaves room for profit. Typical UK figures by sector are a rough sense check, which is what the UK ad benchmarks for cost per click and cost per lead are for, but your own economics should set the target.
Common mistakes
- Chasing the lowest CPL. Ad platforms are good at finding cheap form fills, many of them from people who never answer the phone. On Meta, a higher intent form usually raises CPL and improves quality.
- Counting spam and duplicates. The same person submitting twice is one lead.
- Ignoring calls. If phone enquiries are not tracked, campaigns that drive calls look expensive.
- Comparing channels as if every lead were equal. A lead from a search for “emergency roofer” is rarely worth the same as one from a quiz ad.
How to act on it
Track every lead type, remove duplicates and spam, and record in your CRM which leads became customers. Then send that outcome back to the ad platforms as offline conversions, so their bidding learns to find leads that buy rather than leads that are cheap. Review CPL monthly by campaign, not daily on a handful of leads. Running paid channels against an agreed cost-per-lead target like this is what my performance marketing service is built around.