Advertising, 10 October 2026, 1 min read
What should a lead cost your business?
A simple way to work out the most you can pay for a lead and still grow profitably.
Most businesses set ad budgets by gut feel. Start instead with three numbers: average order value, gross margin and close rate.
The formula
Maximum cost per lead = order value × margin × close rate.
If a customer is worth $1,000 in margin and you close 1 in 5 leads, you can pay up to $200 per lead and still break even.
- #costperlead
- #GoogleAds
- #Metaads
- #advertisingbudget
- #ROI