How much should a Melbourne service business pay for leads?
The right question is not what a lead costs, it is what a booked job costs. A cheap lead you lose most of the time is more expensive than a dearer lead you win, so measure cost per booked job, not cost per lead.
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Key takeaways
- Cost per lead is a misleading number on its own.
- What matters is cost per booked job, after conversion.
- Exclusive leads usually convert better than shared ones.
- Cheap shared leads can cost more once you count the losses.
- Track enquiries, quotes and booked jobs to see the real cost.
Why cost per lead is the wrong number
It is tempting to compare lead providers on price alone. A lead for a few dollars looks better than one that costs more. But the headline price tells you almost nothing about what you will actually pay to win a job.
If a cheap lead is shared with four competitors and you win it one time in five, you are paying for five leads to book one job. The real cost is five times the sticker price.
The number that matters
Cost per booked job is the only figure that reflects what leads really cost you. Everything else is a vanity metric.
What to measure instead
To understand your true cost, you need to follow each enquiry through to a result, not just count how many came in.
- How many enquiries you received.
- How many you could actually quote.
- How many turned into booked jobs.
- What you spent in total to get there.
Divide your total spend by booked jobs and you have your real cost per job. That is the number to compare across any lead source.
Why exclusive leads change the maths
Exclusive leads usually carry a higher sticker price, but you are not splitting each one with competitors, so you win a far greater share of them.
Exclusive leads
- Higher win rate per lead
- Lower cost per booked job
- Less time wasted quoting
- Calmer sales conversations
Cheap shared leads
- Low win rate per lead
- Higher cost per booked job
- Lots of dead-end quotes
- A race on speed and price
Frequently asked questions
Not always, but a low price means little on its own. The test is cost per booked job. A cheap lead with a very low win rate can easily cost more per job than a dearer lead you win far more often.
You need enough enquiries to see a pattern, then track how many become quotes and booked jobs. Even a few weeks of honest tracking will tell you far more than the headline cost per lead.
There is no single number, because it depends on your job values and win rate. A higher-value job justifies a higher cost per lead. The right approach is to work backwards from what a booked job is worth to you.
More insights
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