What is cost per lead?
Cost per lead
Cost per lead is what you pay for one enquiry — ad spend divided by the number of leads generated.
Formula
CPL = Ad spend ÷ Leads
CPL is the headline number most small businesses judge advertising on, and on its own it's close to meaningless. It says nothing about whether those leads answer the phone, turn up to the appointment, or buy.
The figure that matters is cost per closed customer: CPL divided by your close rate. A $20 lead that closes one time in twenty costs $400 per customer. A $60 lead that closes one time in three costs $180. The more expensive lead is four times better business.
Lead quality and lead cost usually trade against each other. Adding qualifying questions to a form raises CPL and raises close rate. Removing them does the opposite. Neither is automatically right — it depends on whether your bottleneck is lead volume or sales time.