Glossary
Cost Per Lead (CPL)
What it costs you to generate one lead, such as an email address or an inquiry, calculated as total spend divided by leads collected.
Cost per lead, or CPL, is what you pay on average to generate one lead. A lead is a person who has shown interest, usually by handing over an email address or filling out an inquiry form. You calculate it by dividing total spend by the number of leads collected.
Total spend / Leads collected = CPL
$300 spent / 150 leads = $2 CPL
CPL is a useful number because a lead is not the same as a sale. You are paying for interest, not for revenue, so a $2 CPL only tells you half the story. The other half is what a lead is actually worth to you once some of those people go on to buy or get sold to a business.
Here is where it connects. If a lead is worth $5 to you on average and you can collect leads for $2 each, the numbers work. If your CPL rises to $8 for that same $5 lead, you are losing money on every one you buy, no matter how cheap the clicks looked.
CPL is central to lead generation businesses, where the lead itself is the product being sold. To see how those numbers play out, read cost per lead explained and how lead generation makes money.