WeBuildPro Global logoWeBuildPro Global

Cost Per Lead & Break-Even Calculator

The most a service business can afford to pay for a lead is its average job value, multiplied by its gross margin, multiplied by its close rate. Enter your numbers below to see that figure, what your ads actually cost per lead, and whether your campaigns make or lose money.

Your numbers

$

What a typical paid job is worth to you.

%

Of every 100 leads, how many become paid work.

%

What you keep after materials and labour.

$

From your ad account, or an estimate.

%

Of every 100 visitors, how many call or enquire.

$

What you spend, or plan to spend, per month.

The example values are illustrative inputs, not industry benchmarks. Replace them with your own.

Verdict

Marginal — leads cost close to what they are worth. Small changes decide whether this works.

Your cost per lead

$100.00

Break-even cost per lead

$105.00

Leads per month

30

Paid jobs per month

10.5

Gross profit after ad spend

$150

Return on ad spend

1.75x

What would change the result

  • At your cost per click, you break even with a conversion rate of 6.7%. You are currently at 7%.
  • At your conversion rate, you break even paying up to $7.35 per click. You are currently paying $7.00.
  • Raising conversion rate is usually cheaper than lowering cost per click: it improves every click you already pay for, and needs no extra budget.

Not sure your conversion tracking counts real leads? If it doesn't, every number above is built on the wrong input. We check that first on every free strategy call.

Book a free strategy call

The three formulas behind it

Nothing here is hidden. Every result above comes from three pieces of arithmetic, which you can check by hand.

What a lead is worth to you

Job value × gross margin × close rate. A $500 job, 60% margin and one lead in three closing gives roughly $100 of gross profit per lead. This is your break-even cost per lead.

What a lead actually costs you

Cost per click ÷ conversion rate. At $7 a click and a 7% conversion rate, each lead costs $100.

Whether it works

If what a lead costs is below what it is worth, the campaign makes money. The gap between the two is your margin for error — and it is usually thinner than people assume.

The input most people get wrong

The calculator is only as good as your conversion rate, and the conversion rate is only as good as what your ad account counts as a conversion. If your tracking counts page views, every tap on a phone link, or form loads rather than submissions, the rate looks far better than reality and every downstream figure is wrong.

Before trusting a cost per lead, check that a conversion means a real call or a submitted form. On one account we took over, fixing exactly that was the single biggest reason cost per lead fell from $716.65 to $90.23.

Frequently asked questions

How do I calculate the most I can afford to pay per lead?

Multiply your average job value by your gross margin and by your close rate. If a job is worth $500, you keep 60% of it, and one lead in three becomes a job, each lead is worth about $100 in gross profit. Paying more than that per lead loses money.

How is cost per lead calculated?

Cost per lead equals your cost per click divided by your landing page conversion rate. At $7 per click and a 7% conversion rate, each lead costs $100. Improving either number lowers it, and conversion rate is usually the cheaper one to improve.

Why use gross profit rather than revenue?

Because revenue is not what you keep. A lead that brings in $150 of revenue on a job with a 50% margin produces $75 you can actually spend. Judging lead cost against revenue makes unprofitable campaigns look healthy.

What is a good return on ad spend for a service business?

It depends entirely on margin. A business keeping 60% of revenue breaks even at roughly 1.7x return on ad spend; one keeping 30% needs over 3x. That is why this calculator works from your margin rather than a generic target.

Should I lower my cost per click or raise my conversion rate?

Usually raise conversion rate first. It improves the return on every click you already pay for and needs no extra budget, whereas lowering cost per click often means bidding on less valuable searches. Faster pages, a visible phone number and shorter forms are typical fixes.

Use this calculator on your own site

You're welcome to link to this calculator from your own articles, client resources or training material. Link to https://webuildpro.online/tools/cost-per-lead-calculator.

Related reading: What a lead actually costs on Google Ads · Why a website gets traffic but no leads · Google Ads management