- Areeb Mirza
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- Your actual lead cost is much higher than you think.
Your actual lead cost is much higher than you think.
Areeb Mirza
January 27, 2025
Some people just look at the cost per lead metric, which is fine, but let me give you a scenario what if you spend $3,000 on ads and your ticket price is $4,000 for example:
Scenario A:
Cost/lead is $25 = 120 leads
Closed 2 deals
Revenue: $8,000
Cost per customer acquisition: $1,500
Total profit: $5,000
Scenario B:
Cost/lead is $500 = 6 leads
Closed 3 deals
Revenue: $12,000
Cost per customer acquisition: $1,000
Total profit: $9,000
Most people will turn off the second Ad immediately (scenario B) because the CPL is too high, and they will let the first ad run forever because they are getting leads right? But notice how the closed deals completely changes both scenarios - you spent $3,000 on scenario A you made $6,000 and scenario B you made $9,000.
(again ideal scenarios)
What we've done here is, instead of looking at the cost per lead, we're looking at the cost to close a meeting.
So in scenario A, you spent 3k, your cost per close is 1,500 to acquire a 4,000 customer. In scenario B, you spend 3k and your cost per close is 1,000 to acquire a 4,000 customer.
That's the difference, it is if the prospect is ready to move forward or not.
Scenario B is much more realistic, but you need to calculate your CAC.
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