Cost per Lead (CPL).

The formula is undisputed; the numerator is not. Do you count only media costs, or also agency fees, production of ad materials, tool costs and in-house working time? Depending on the answer, the same CPL can differ many times over. The denominator is no more fixed: is every submitted form a lead, or only a checked enquiry with contact details and a recognisable need? Anyone comparing CPL values, between channels, periods or providers, must first align both definitions. Without that, you are comparing calculation methods, not performance.

CPL alone says little about profitability. What matters is the chain through to the order. A worked example with freely chosen, rounded figures to illustrate the mechanics: channel A delivers leads at CHF 40, of which one in twenty becomes an order, which makes CHF 800 per order. Channel B delivers leads at CHF 120, of which one in four closes, which makes CHF 480 per order. Here the more expensive lead is the cheaper customer. Managing by CPL alone systematically optimises towards the worse business, because cheap contacts are always easier to generate than suitable ones.

In practice this means CPL is always reported together with three other figures: the share of leads that can be worked on at all, the close rate and the average order value. Only these give you the cost per customer and the answer to whether the channel pays for itself. Looking at the contribution margin rather than revenue is also useful, especially for services with a high share of time. To put a paid-click channel in context, the CPC belongs in the picture too: if the cost per click rises, the CPL rises even if the website still converts as well as before.

A word on benchmarks. There are plenty of industry benchmarks for CPL in circulation, but because of the different lead definitions and cost boundaries they can hardly be transferred; they also mostly come from markets other than Switzerland. If you use such a figure, state the source, the year of collection, the market and the lead definition. And if someone guarantees you a CPL, be wary: a provider can steer this metric through the definition of a lead itself. So always ask for the chain through to the order, including from us.