What should a lead cost on Facebook ads?

There's no benchmark worth copying, and any figure quoted as one should be ignored. The right cost for a lead is whatever still leaves profit after your own close rate and your own job value, which means a company selling system replacements and a company selling filter changes can't use the same number. The useful work is arithmetic on your own business, and it takes one sitting with a notepad.

Why isn't there a benchmark number for this?

Because the answer depends on three things that differ in every business, and they multiply rather than add.

What one booked job is worth to you after the cost of doing it. What share of leads your team actually books. And how long a customer stays, which for some trades is one job and for others is years of route work.

Move any of those and the answer moves a long way. A heating and air company selling a replacement system and the same company selling a maintenance visit aren't allowed the same cost per lead, and that's one business in one week.

Published benchmarks average across industries, countries, offers and seasons. What comes out describes nobody. Judging your own account against it is how profitable campaigns get switched off and unprofitable ones get scaled.

How do I work out what a lead is worth to me?

Three figures, none of which come from an ad platform.

• Gross profit on an average booked job. Not the invoice. What's left after the labor, the parts and the truck.
• The share of leads your team actually books, measured on the leads somebody genuinely contacted rather than on all of them.
• What the customer is worth after that first job, which for recurring work is most of the answer and for one-off work is often nothing.

Multiply the profit by the share you close and you have what an average lead is worth to your business. Your ceiling on cost per lead sits below that figure, and how far below is a decision about the margin you want rather than a rule anybody can hand you.

Do it before you look at the account, not after. Owners who work it out first usually find the leads were cheaper than they had assumed, and the ones who never do it end up judging a number against a feeling.

Which lead do I even mean?

That question matters more than the cost, because the word covers four different things and businesses compare them as though they were one.

A form fill isn't a lead. It's somebody who typed their details in. A contacted form fill is a lead. A qualified, contacted form fill, inside your service area, for work you actually do, is the thing worth paying for. A booked job is what you were really buying.

Cost per booked job is the only one of those figures that can't mislead you. A cheap lead nobody reached costs more than an expensive one that turned into work, and the account will report the cheap one as a success all month.

One real example is worth sitting with. A therapist in private practice spent $1,000 on advertising, and it produced 27 leads and 6 new clients. Divide the spend by the leads and you have her cost per lead. Divide it by the clients and you have her cost per client, which is a much larger number and the only one that mattered, because her clients stay for years. Anybody looking at the first figure alone would have judged that campaign on the wrong line.

What do I do when the number starts climbing?

Treat it as a content problem before touching the budget.

Cost per lead rises for a short list of reasons, and most of them are identifiable inside a week.

• Creative fatigue. The same audience has now seen the same advertisement often enough to stop responding to it. This is the common one.
• An audience too small to keep spending into without repeating yourself, which is a real constraint in a town the size of Bixby.
• A weak offer, which shows up as plenty of views and very few inquiries.
• A landing page that has quietly broken, or that never matched the promise the advertisement made.
• Seasonality. The week everybody in your trade is bidding for costs more than the week before it.

New creative on a cycle keeps the number climbing slowly instead of spiking. Metcalf Media shoots a month of it in one shoot day for that reason, because an account starved of fresh material gets expensive on a schedule you can nearly predict.

Is a cheap lead always better?

No, and chasing cheap is how an account fills up with people who were never going to buy.

Lowering the bar produces more leads at a lower cost every time. Remove the qualifying questions, promise something vague, widen the radius, and the report improves while the calendar doesn't. The leads arrive from outside the area, for work you don't do, from people comparing four companies on price alone.

Qualifying inside the advertisement and on the page costs you leads on purpose. Cost per lead goes up and cost per booked job goes down, and only one of those two is money. Metcalf Media qualifies people before the lead is ever created, which is how Facebook and Instagram advertising is set up on every account it runs.

When does this number not matter yet?

Below roughly $750,000 a year in revenue, or any time nobody can answer the phone reliably. At that stage a website, a properly built profile and follow-up that fires inside sixty seconds do more than paid traffic can, and they cost less to run.

It's also worth knowing what the alternative costs. The national retainer companies commonly charge a local business around $1,500 a month and host a website for it. Money going out on a retainer that produces nothing measurable is money that wasn't in the auction, and it's the same budget either way.