If you don't pay attention to this data, you won't discover how your efforts to attract potential customers are affecting the results you get. This is all you need to know to start calculating the CPL for your own business. thailand mobile database Then, you can start making decisions based on concrete data.
Know your own data to calculate how much a lead costs
There are many factors that determine the answer to the question of how much a lead costs. To be able to know this data accurately, you need to know the following metrics:
The price to sell a product or complete a service: This is the average price your customers pay for a single product or service.
Gross profit per product and service sold: The amount you receive for a single product sold or service completed minus the cost of the goods sold.
The percentage of leads that convert to sales: The percentage of qualified leads you get through your calls to action in each campaign, web form registrations, newsletters, etc.
Lead generation campaign costs : This includes the total direct costs of the campaign, including all fixed and variable costs that can be directly attributed to the campaign. It also includes creative and production work, the cost of developing and producing content, and the normal variable costs of developing and executing campaigns.
What is the most you can pay for a lead?
Before you calculate the maximum amount you can pay for a lead, you need to know the maximum amount you would pay for a sale. The most you can spend on a new sale while still being profitable is the gross profit you make from a single sale of a product or service .
As an example, imagine your company has an average revenue of €500 for a service, with a gross margin of 40%. This means that you receive €200 in gross profit from this service. The most you can pay for a lead is €200.
Example: Service (€500) x Gross margin (40%) = Gross profit (€200).
You should be willing to invest 100% gross profit to get a new lead. These new customers can become lifelong customers once they are inside the sales funnel.
This way, leads will help you grow your business. They will recommend your brand to other leads, which will allow you to grow, have more clients and therefore more sales. The goal is to be able to make every lead a sale.
The value of the potential client
Now that you've calculated the amount you would pay for a sale, you need to calculate what you would pay for a lead. To find out, you need to multiply that amount you would pay for a sale by your purchase and sale conversion rate. For the same example, imagine that your purchase/sale conversion rate is 30%.