Cost per lead
Cost per lead (CPL) is the average amount a business spends on marketing to generate one new inquiry. It is calculated by dividing total marketing spend over a period by the number of leads produced in that period.
Also called: CPL, cost per inquiry, cost per acquisition of a lead
CPL is the standard way to compare marketing channels. Spend on search ads, Local Services Ads, directories, social campaigns and referral programs can each be divided by the leads they produced to see which channel buys an inquiry most cheaply. It is usually tracked alongside conversion rate and customer value, since a cheap lead that never converts is not a bargain.
The number depends heavily on what counts as a lead. Some businesses count every inbound call; others count only calls that reach a person and pass qualification. Consistency matters more than the definition itself, provided the same rule is applied across channels.
CPL also frames the cost of not answering. A lead that has already been paid for and then rings out has cost the full CPL and returned nothing, which is why answer rate and speed to lead are typically reviewed alongside it.