What can you actually afford to pay for a lead?
A cost per lead is not high or low on its own. It is high or low against what a job is worth to you. Put in your job value, your margin and the share of leads that become work, and this tells you the most you can pay for an enquiry before the account stops making money.
Your numbers
The answer
Most you can pay for a lead
$120.00
At break-even. Anything above this loses money on the first job.
Break-even ROAS
2.50×
Revenue needed per dollar of ad spend
Your ROAS today
3.33×
$300.00 of revenue per $90.00 lead
Gross profit per job
$400.00
40% of $1,000.00
Headroom per lead
$30.00
Left over after paying for the enquiry
Headroom per month
$1,200.00
Across 40 leads
How this was worked out
- Gross profit per job
- $1,000.00 × 40% = $400.00
- Gross profit per lead
- $400.00 × 30% = $120.00
- Break-even ROAS
- 1 ÷ 40% = 2.50×
- Headroom per lead
- $120.00 − $90.00 = $30.00
- Maximum monthly spend at break-even
- $120.00 × 40 leads = $4,800.00
What each cost per lead leaves you, at these job economics
| Cost per lead | Profit per lead | Profit per month | Verdict |
|---|---|---|---|
| $30.00 | $90.00 | $3,600.00 | 75% of the gross profit stays with you |
| $60.00 | $60.00 | $2,400.00 | 50% of the gross profit stays with you |
| $90.00 | $30.00 | $1,200.00 | 25% of the gross profit stays with you |
| $120.00 | $0.00 | $0.00 | Break-even — the campaign pays for itself and nothing else |
There is no published benchmark for where in this table a business should sit. It depends on how much of the profit you want to reinvest in growth, which is your decision and not a number anyone can look up.
What to do with this
- Every lead at $90.00 leaves $30.00 of gross profit after the cost of getting it. Across 40 leads a month that is $1,200.00 before overheads.
- You could pay up to $120.00 per lead before the campaign stopped contributing. Sitting at 75% of the ceiling means there is room to bid for better positions or a wider service area if you want the volume.
- Break-even ROAS is 2.50×. Below that, revenue does not cover the cost of delivering the work plus the cost of buying it.
Change anything above and the link in your address bar changes with it, so you can send the exact result to whoever needs to see it. Nothing you type is sent anywhere — the whole calculation happens in your browser.
What this does, and how the maths works
What it does
- Works out the gross profit sitting behind one enquiry, which is the true ceiling on what an enquiry can cost.
- Gives you the break-even return on ad spend — the revenue every advertising dollar has to bring back before the campaign is merely paying for itself.
- Then shows what your current cost per lead leaves on the table, per lead and per month.
How to use it
- Enter the average value of a job, before GST and before materials are deducted.
- Enter your gross margin on that job. Gross margin is what is left after labour and materials, not after rent and insurance.
- Enter the share of enquiries that turn into paid work. Count from your own records, not from memory — almost everyone overestimates this one.
- Enter what you are paying for a lead now, then read the headroom figure.
The formula
- Gross profit per job = job value × gross margin
- Gross profit per lead = gross profit per job × lead-to-job rate
- Maximum cost per lead = gross profit per lead (at break-even, nothing left over)
- Break-even ROAS = 1 ÷ gross margin
Reading the answer
- The maximum cost per lead is a ceiling, not a target. Paying exactly that means the campaign washes its face and pays you nothing for the risk.
- Most businesses want to spend somewhere between a third and a half of the ceiling, so the account funds itself and still leaves a margin. That is a commercial choice, not a rule from any dataset.
- If your current cost per lead is above the ceiling, you are buying work at a loss. Raising the close rate usually moves the ceiling faster than cutting the cost of the click does.
What it cannot tell you
This is a single-job calculation. It ignores repeat work and referrals, which is why a business with strong retention can afford far more per lead than this suggests. Run the lifetime value tool afterwards if your customers come back.
Where every figure on this page came from
Every default in the calculator above is either your own number or a figure from one of the studies below, with the market and the sample stated. Nothing here is an estimate somebody felt was about right, and no United States figure is wearing an Australian label.
This tool cites no third-party figures. Every input is your own, which means the answer is only as good as the numbers you put in — and that nothing here is a benchmark dressed up as a default.
Frequently Asked Questions
Everything you need to know about working with SoudCoh
Have more questions? Let's chat!
Book a Free Strategy CallIt is the return on ad spend at which the revenue you buy exactly covers the cost of delivering the work plus the cost of the advertising. The arithmetic is one divided by your gross margin: at a 40% gross margin, break-even ROAS is 2.5, so every dollar of ad spend has to bring back $2.50 of revenue before you are ahead. At a 25% margin it rises to 4. Margin, not spend, is what sets the bar.
The absolute ceiling is the gross profit sitting behind one enquiry: job value, times gross margin, times the share of enquiries that become work. A $1,000 job at 40% margin closing 30% of the time carries $120 of gross profit per enquiry, so $120 is the point at which the campaign stops contributing. Most businesses aim somewhere between a third and a half of that ceiling so the work still pays them. That split is a commercial preference, not a figure from any dataset, and we are not going to dress it up as one.
Gross margin — what is left after the labour and materials on that specific job. Net margin subtracts rent, insurance, vehicles and admin, which you pay whether or not the job exists. Using net margin here makes the ceiling look far lower than it is and talks businesses out of advertising that is actually working.
Not immediately. Check the close rate first, because it is the multiplier on the whole sum and it is the number people guess at most. A move from 20% to 30% raises the ceiling by half. After that, look at what people actually searched before they clicked: in the accounts we run, the gap between an affordable and an unaffordable cost per lead is usually made of searches that were never going to become a job.
No, deliberately. This tool values one job. If your customers come back — maintenance contracts, service plans, a plumber people keep the number for — the real ceiling is higher, and the lifetime value calculator is the one that shows it. We have kept the two separate because a break-even figure inflated by an assumed repeat rate is how businesses end up overspending for a year before anyone checks whether the repeats arrived.
Run these next
One number rarely settles anything on its own. These three answer the questions this one raises.
Cost per lead calculator
Work out cost per click, conversion rate and cost per lead from three numbers, then compare against a US benchmark and our measured Australian range.
SoudCoh case studies · WordStream 2026
Customer lifetime value
Add repeat work, retention and referrals to a first job, then set the result against your acquisition cost — with no invented benchmark ratio attached.
Your own numbers only — no benchmark used
True cost per booked job
Add management fees, tools and tracking to your media spend, divide by booked jobs rather than leads, and see what is left of the margin after acquisition.
ATO
We will read
your real ones.
Send us the account rather than the estimate. We will tell you what it is actually costing to win a job, which part of the chain is leaking, and whether it is worth fixing — before anyone asks you to sign anything.