Free tool
What is a lead
worth to you?
What you can afford to pay for a lead comes from three numbers: what a customer is worth in gross profit, how many leads become customers, and how much of that profit you're willing to spend to win one. A customer worth $1,200 in profit, with 1 in 4 leads buying and 30% of profit set aside for marketing, means a lead is worth up to $90. This calculator does the sum for your numbers, on the whole relationship and on the first sale only.
Made by Dan Picken, founder. Last checked 2 November 2026.Customer profit x close rate x the share you spend. Then check it against the first sale alone. Runs in your browser. Nothing you type is sent anywhere.
Lead value calculator
What can you
pay for a lead?
Put in your own numbers. The starting ones are made up.
Most you can pay per lead
-
- Customer value (gross profit)-
- Most you'd spend to win a customer-
- Per lead, first sale only-
Profit,
not revenue.
A $400 job where you keep $200 is worth $200 to your marketing budget, not $400. Working in revenue is a common reason businesses overpay for leads and wonder why the bank account doesn't match the dashboard.
Use gross margin: what's left after the direct costs of doing the job or making the product. Rent, wages and the rest still have to come out of it, which is why you only spend a share on winning customers.
Repeat business
or the first sale?
If customers come back, a lead is worth more than its first sale. A dentist, a mechanic or a coffee wholesaler can afford to pay more per lead than a one-off job like a fence.
But repeat business is a promise, not cash. If money is tight, set your budget on the first-sale figure, and treat repeat business as the profit that arrives later. The calculator shows both.
Using the
number.
In Google Ads, the most you can pay per lead is a sensible ceiling for Target CPA bidding, where you set the average cost per conversion you want. Start below the ceiling, not at it.
The number has a second use. Google Ads lets you assign a value to each conversion, and its automated bid strategies use those values to set bids. Enter what a lead is worth from this calculator, in profit, and value-based bidding goes after the leads that pay instead of the cheapest form fills.
The quickest way to raise what you can pay isn't more budget. It's a higher close rate: answering faster, following up, and quoting clearly. A lead you close is worth the same whether it cost $20 or $90.
For businesses that sell to other businesses, with several stages from lead to deal, the lead-to-deal calculator on the B2B hub works it out stage by stage.
For online
stores.
Online stores usually think in return on ad spend rather than cost per lead. The same logic applies: work from gross profit, not revenue. Google's Target ROAS bidding aims for a return you set, and setting it from revenue alone is how stores end up 'profitable' in the ad account and short in the bank.
The break-even ROAS calculator on the e-commerce hub does that sum with your margin, shipping and fees.
If you're registered for GST, work in prices ex GST, because the GST isn't yours to spend on marketing. Registration becomes compulsory once your GST turnover reaches $75,000 ($150,000 for a not-for-profit), so check which side of that line you're on before you set targets.
What I see most often
The usual
leaks.
- 1
Judged on cost per lead alone
Cheap leads celebrated, nobody checking how many became customers.
- 2
Revenue used as value
Lead targets set from the sale price, not the profit, so ads look profitable while the business isn’t.
- 3
No close rate known
Nobody counts how many enquiries turn into sales, which makes every number above a guess.
The honest bit. The answer is only as good as your close rate. If you don't know it, count the next 20 enquiries and what happened to each. That's worth more than any calculator.
Questions
people ask.
How much should I pay per lead?
No more than a customer's gross profit, times the share you're willing to spend to win one, times your close rate. The calculator on this page does the sum.
What is customer lifetime value?
The total gross profit a customer brings over the time they buy from you: profit per sale, times purchases per year, times years they stay.
Should I use revenue or profit?
Profit. Paying for leads out of revenue can make ads look profitable while the business loses money on every customer.
How does this relate to Target CPA in Google Ads?
Target CPA is the average cost per conversion you ask Google to aim for. The most you can pay per lead is a ceiling for it; start below that.
Related
Keep
going.
Want me to
take a look?
Takes a minute. Audits come back within 1 to 2 business days. For anything else, I'll get back to you as soon as possible.
What happens next
- 1I'll ask for read-only access, or just your website for a search audit.
- 2I go through it and write up the 3 biggest fixes.
- 3A 20-minute call to walk you through it. No pitch unless you ask.