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What should a lead cost?
Calculate what a lead or purchase can cost at maximum, backed by your margin, your customer value and the share of leads that become customers. Including your breakeven ROAS.
Revenue excluding VAT. In the case of a subscription: what a customer pays in the first year.Sales excluding VAT.
€Sales minus purchasing or production costs. An estimate is good enough.
%Think of hosting, maintenance, a subscription or follow-up orders. Nothing? Enter 0.Repeat purchases, excluding VAT. Nothing? Enter 0.
€per yearOf the 10 leads, 1 customer is taken? Then that's 10%.
%It is shown in Google Ads or Meta as cost per conversion.
€Example: A web agency sells websites for €20,000 with a gross margin of 50%, then hosting for €1,000 per year with an 80% margin, for 5 years. 10% of the leads become customers and a lead now costs €300. Fill in the questions for your own figures.
Fill in the question 1 in, then the result appears again.
Your answer
A lead may cost a maximum amount
€1.000
Your breakeven ROAS
200%
Then you earn every new customer back on the first sale. If you count the entire customer relationship, the absolute limit is €1.400 per lead. You can't earn it back up there.
This is your ceiling. Pay more per lead, Instead of generating money, it costs you money to grow it.
- Until €1.000 per lead: Reimbursed on the first sale
- Until €1.400: Reimbursed over the customer relationship, but later
- Beyond that: never worth it
Now you pay €300 per lead, Therefore, €3.000 per new customer.
You get that back on the first sale. You keep that per customer. €11.000 over after advertising costs.
The first sale doesn't cover that. You're shooting for one per customer. -€7.000 before, which you will receive after 0 months worth it; in the end you keep €11.000 About.
That adds up to more than one customer in total. With every new customer you lose -€11.000.
That's how we get to it.
| Gross profit on the first sale | €20.000 × 50% | €10.000 |
|---|---|---|
| Profit after that | €1.000 × 80% × 5 years | + €4.000 |
| Gross profit across the entire customer relationship | €14.000 | |
| Per lead, because 10% becomes a customer | €10.000 × 10% | €1.000 |
| Absolute limit per lead | €14.000 × 10% | €1.400 |
| Break-even ROAS: revenue ÷ gross profit on the first sale | €20.000 ÷ €10.000 | 200% |
Gross profit, not revenue: you pay for advertisements from what remains after purchasing or producing.
Where is your space located?
You are below your maximum, so there is room to scale up. Until €1.000 per lead Every new customer still has to earn their money back on the first sale: €700 more than now.
To earn back every customer on the first sale, there are two buttons:
- Better-priced leads: a lead can be a maximum of €1.000 costs, now €300.Cheaper purchases: a purchase may be a maximum of €1.000 costs, now €300. That's what it's about Digital Budget Optimization About.
- More leads that become customers: 3% instead of 10% at the same lead price.With this lead price, more than 100% customers should be obtained, so only in combination with cheaper leads. That's what it's about Customer Journey Advertising About.A larger first order: at least €6.000 with the same advertising costs, now €20.000. Consider bundles, a higher threshold for free shipping or a stronger price offer.
Usually it is a combination of both.
Check your current figures
Whether your ads are generating revenue, you can see it in a single number in your ad account.
Search Google Ads or Meta for your cost per conversion (per lead) (per purchase), Over the past three months:
- Until €1.000: Every new customer earns their money back on the first sale. There is room to scale up.
- Until €1.400: You earn back a customer, but only after a while. That money pays off for you.
- Above €1.400€1.000: Every new customer costs more than it brings in.
Fill in the amount in the last question, then you'll see where you stand now.
Calculation example using your input, no prediction or promise. The tool calculates averages; what a lead or purchase actually costs depends on the market, supply, and execution. Only media budget counts: management costs and other costs are not included.
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// Next step
Looking at your grades together?
// Method
That's how we calculate
The tool calculates gross profit, not revenue. You pay for ads based on what’s left over after purchasing or manufacturing.
What a new customer can cost. The gross profit on the first sale is the safe limit: up to that amount you immediately earn a new customer. If a customer subsequently generates revenue, such as hosting, maintenance, a subscription or repeat purchases, the tool counts that gross profit over the number of years that that revenue comes in. That is the absolute limit across the entire customer relationship (customer value). If a customer costs more, you will never recover that money.
From customer to lead. What a customer might cost, multiplied by the percentage of your leads that become customers, is what a lead might cost. In direct sales, every purchase is a new customer and the amount applies per purchase.
Break-even ROAS. The revenue from the first sale divided by the gross profit on it. If each euro of advertising costs yields less revenue than this percentage, then you will lose money on the first sale.
Example. A €20,000 website with a 50% gross margin yields €10,000 in gross profit. Hosting of €1,000 per year with an 80% margin, over five years, adds €4,000: €14,000 over the entire customer relationship. If 10% of the leads become customers, then one lead costs €1,000 to win back each customer on the first sale. The absolute limit is €1,400 per lead. The break-even ROAS on the first sale is 200%.
Only media budget counts: what you pay to the advertising platforms. Management costs and other costs not included. It’s a calculation example with your own input, not a forecast.
// Questions
Frequently asked questions
Sources
- AceDigital proprietary data. Calculation model and starting points from our own campaign practice
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