Working Out Lead Costs

 

In my last email, I told you about a client who has a lead cost of $69.

I also told you that this isn’t a figure that applies to every business. It’s the one that applies to her business. 

The question now is how we got to that lead cost.

Our first port of call was to look at how much commission the client makes on a sale.

She’s a mortgage broker, so she gets a percentage for every mortgage she gets for a customer.

From there, we looked at how much the client pays in commission to team members when she makes a sale.

Then, we asked for two more figures from the client:

1. Desired profit per sale
2. Her conversion rate

We took all of those numbers and ran some calculations to see what each sale cost her. We then ran that against her conversion rate for her average campaign and checked against her desired profit.

That’s how we came to the $69 figure.

If the lead costs more, the profit isn’t where she wants it to be.

The point is that you need to look into every cost that goes into making a sale for your business. And you need to compare that against how much profit you make per sale and how well you convert.

Eventually, you’ll come to your ideal lead cost.