What is a good cost per lead? How to work out your own number
Business owners often ask whether ₹150 or ₹800 per lead is “good”. The answer depends entirely on your business. A lead for a home-loan agent is worth far more than a lead for a pizza shop. Here is how to work out your own benchmark.
You need three numbers
- Average profit per customer — the gross profit from a typical customer (ideally over their lifetime, not just the first order).
- Close rate — out of every 10 leads, how many become paying customers?
- Marketing share — how much of that profit you are willing to spend to acquire the customer.
The formula
Maximum cost per lead = profit per customer × close rate × marketing share
A worked example
Imagine a coaching institute where each student brings ₹12,000 in profit. Two out of every ten enquiries enrol (a 20% close rate), and the owner is happy to spend up to 30% of profit on marketing.
₹12,000 × 0.20 × 0.30 = ₹720 per lead.
So any campaign delivering leads below ₹720 is profitable, and anything well below it is a candidate for more budget. These figures are only an illustration — use your own.
Improve the number from both sides
- Lower the cost: better creatives, tighter targeting and faster landing pages.
- Raise what a lead is worth: faster follow-up (call within minutes, not hours), a WhatsApp nurture sequence and better sales scripts often lift close rates dramatically.
Once you know your number, every campaign decision gets easier: you know when to scale, when to fix and when to stop.
