How do you calculate the value of a lead?

Multiply your close rate by your average job or sale value, by your profit margin, by the number of times an average customer repeats. That gives you the expected profit from one lead — a very different, usually much lower, number than the revenue from one closed sale, which is the figure most businesses use by default.

What's the maximum I should pay for a lead?

As a starting rule, no more than a third to a half of the lead's calculated value, to leave room for the leads that don't close and for margin on the ones that do. This calculator shows both the raw lead value and a suggested maximum CPL band based on that rule — treat it as a sanity check, not a hard ceiling.

Tools

Lead value calculator

Before any spend decision makes sense, you need this number first: what is one lead actually worth to your business?

Value of one lead —

Suggested max CPL (⅓ of value) —

Upper bound (½ of value) —

Why this number changes how you should spend

Businesses that don't calculate lead value tend to make one of two mistakes: they judge every channel against the full sale price, which makes every lead look worth almost any spend, or they judge it against a gut-feel number that ignores repeat business entirely, which makes genuinely profitable channels look too expensive to justify.

Once you know this number, it plugs directly into the Local SEO ROI calculator and cost per lead calculator — both assume you already have a defensible figure for what a lead is worth, rather than a guess.

Is this the number your marketing decisions are actually based on?

Most spend decisions get made without this figure.

If you've never calculated lead value this way before, it's worth doing properly once — it changes which channels look worth scaling and which don't.

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