Enter your average sale
Take the last 20 or 30 jobs from your records and use their average. Add purchases per customer when people buy from you more than once.
Free tool
Lead value calculator
This lead value calculator turns your average sale and close rate into the revenue one lead is worth. It then shows the most you can pay for a lead before your advertising stops making money.
What one lead is worth
Enter your average sale value and your close rate to see what a lead is worth.
Revenue per lead
- Value of one customer
- Leads needed for one sale
- Break-even cost per lead
- Cost per lead at your target return
This tool runs in your browser. Nothing you enter is sent or stored.
How do you calculate the value of a lead?
The value of a lead is your average sale multiplied by the share of leads that become customers. A remodeling company with an average job of 8,000 and a close rate of 12% earns 960 in revenue for each lead it receives.
Most leads never buy, which is why the figure is an average. Eight or nine leads in the example produce one job between them, and the value of that job is shared across all of them.
How much are leads worth in profit?
A lead is worth its revenue multiplied by your profit margin. At a 35% margin, the 960 lead above leaves 336 after the cost of doing the work. That figure is your break-even cost per lead.
When people ask how much are leads worth, they often quote revenue and then pay too much. Paying 400 for a lead worth 960 in revenue looks safe, and at a 35% margin it loses 64 on every lead.
What should you pay for a lead?
You should pay the revenue per lead divided by the return you want from your advertising. A business that wants 4x from its ad spend and earns 960 per lead should pay up to 240.
This kind of lead valuation gives you a number to hold your campaigns and your lead vendors to. Compare it with what you pay today using the cost per lead calculator.
How do you make each lead worth more?
You make each lead worth more by raising your close rate, because the sale value is usually fixed by the work. Moving from 12% to 15% in the example lifts revenue per lead from 960 to 1,200 without a single extra lead.
Close rates rise when sales calls start with the right information. A Growform lead qualification form asks about the project, the budget and the timing before the contact details. Phone validation prompts the lead to correct a mistyped number while they are still on the form, so more of your leads can be reached.
How to use the lead value calculator
Enter your close rate
Divide the customers you won by the leads you received in the same period.
Add margin and target
The margin gives you the break-even cost per lead. The target return gives you the price to aim for.
How Growform raises the value of your leads
The form decides what your sales team knows before the first call and whether the number they dial is real.
- Every lead arrives with qualifying answers.
Buttons and sliders collect the job type, the budget and the timing in a few taps.
- Contact details are checked on the form.
Email validation and phone validation catch mistakes while the lead can still fix them.
- Unsuitable leads are marked before they reach sales.
Disqualification rules act on the answers, and each reason is recorded against the lead.
- Sales hear about a lead within moments.
Email alerts and webhooks fire when the form is completed.
Frequently asked questions
What is the formula for lead value?
Lead value equals average sale value multiplied by close rate. Multiply the result by your profit margin to express it as profit.
Is lead value the same as customer lifetime value?
No. Customer lifetime value is everything one customer spends with you. Lead value is that amount multiplied by the chance that a lead becomes a customer.
How do agencies use lead value?
Lead generation agencies use it to set prices. A client who earns 960 in revenue per lead has room for a pay-per-lead or pay-per-appointment fee that a client earning 150 per lead does not.
Should each campaign have its own lead value?
Yes, when close rates differ by source. Search leads and social leads often close at different rates, so calculate the value for each and set separate cost per lead targets.
Why this tool is different
The tool separates what a lead is worth in revenue from what you can afford to pay for it.
- Revenue per lead comes from two fields, and the bars show it beside the value of a customer so the share is visible.
- Margin and target return are optional, and each one adds a ceiling on cost per lead rather than changing the value itself.
- Repeat purchases are a single multiplier, which suits maintenance plans and subscriptions without a lifetime value model.
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