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01 / Lead economics

Target cost-per-lead.

Start with your customer economics. Find a lead cost that leaves room for profit.

Private by design

Your business numbers

Start with an example
Use the same revenue period as your margin.
Formatting only. No currency conversion.
%
Revenue left after direct delivery costs.
%
Share of gross profit available to acquire a customer.
%
For example, 1 customer from every 10 leads = 10%.

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Your target cost-per-lead

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per lead, based on your assumptions

An affordability scenario, not a performance forecast.

Gross profit per customer
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Allowable acquisition cost
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Lead-to-customer rate
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If your allocation also covers agency fees, creative, or other acquisition costs, deduct those before treating this as an advertising-only target.

The working

A target grounded in your margins

First, work out the gross profit from a new customer. Set aside the share you can use to acquire them, then multiply it by the fraction of leads that become customers.

Target CPL = customer revenue × gross margin × acquisition allocation × close rate

A worked example

What a $20 target looks like

A $1,000 customer at a 50% margin produces $500 gross profit. Allocating 40% gives you $200 to acquire that customer. At a 10% close rate, that means a target of $20 per lead.

This does not account for overhead, cash-flow timing, or repeat purchases unless you include them in your assumptions.