Cost per lead is the total $ spent to acquire a lead. This is extremely useful when reporting to your manager the cost effectiveness of your $1.3 million marketing campaign and why it only produced 1 lead.
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Marketing Manager: Our last campaign was an astounding success. We closed 1 deal which brought over $500 in annual recurring revenue (ARR)
CMO: what was your cost per lead?
Marketing Manager: I don’t know
CMO: I see we sent them a gift card. How much was on each gift card?
Marketing Manager: I think $200
CMO: We also see we flew them down to Miami? How much did that cost
Marketing manager: First class tickets were on sale that week. Usually it costs $2,000 to fly round trip from Fort Lauderdale to Miami but I got them for only $500! Saving the company $1,500!
CMO: Nice! So we spent $200 on a gift card, and then we saved $1,500 on the plane ticket, so that means our cost per lead was -$1,300 per lead...for every -$1,300 lead we spent, we brought in $500 ARR
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Marketing Manager: Our last campaign was an astounding success. We closed 1 deal which brought over $500 in annual recurring revenue (ARR)
CMO: what was your cost per lead?
Marketing Manager: I don’t know
CMO: I see we sent them a gift card. How much was on each gift card?
Marketing Manager: I think $200
CMO: We also see we flew them down to Miami? How much did that cost
Marketing manager: First class tickets were on sale that week. Usually it costs $2,000 to fly round trip from Fort Lauderdale to Miami but I got them for only $500! Saving the company $1,500!
CMO: Nice! So we spent $200 on a gift card, and then we saved $1,500 on the plane ticket, so that means our cost per lead was -$1,300 per lead...for every -$1,300 lead we spent, we brought in $500 ARR
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