Cost Per Lead (CPL)
The average cost of acquiring a single lead through marketing or advertising efforts.
Definition
Cost per lead is a marketing metric that measures the total amount spent to generate one qualified lead. It is calculated by dividing total marketing or campaign spend by the number of leads generated. CPL is used to evaluate the efficiency of lead generation channels, campaigns, and overall marketing investment.
CPL varies dramatically by industry, channel, and lead quality. A lead from organic search may have a very different CPL than one from paid social, and a marketing-qualified lead typically costs more than a raw form submission.
Why It Matters
CPL is essential for marketing budget optimization. By tracking CPL across channels and campaigns, marketing teams can identify which investments generate leads most efficiently and reallocate budget from underperforming channels to high-performers.
Understanding CPL in context — relative to customer lifetime value and conversion rates — enables strategic decisions about growth. If your CPL is $100 but each customer is worth $10,000, aggressive spending is justified. If the lifetime value is $150, the math demands efficiency.
Examples in Practice
A B2B company discovers their LinkedIn advertising CPL is $180 while their webinar CPL is $45, prompting a shift in budget that generates three times more leads at the same total spend.
A marketing team reduces their Google Ads CPL from $85 to $52 by improving landing page relevance and adding negative keywords, saving $200,000 annually while maintaining lead volume.
A SaaS company tracks CPL by lead quality tier, finding that their highest-quality leads come from referral programs at $25 CPL, while paid search leads at $60 CPL convert at half the rate.