Tool
Target CPL calculator
Work back from what a customer is worth to what you can afford to pay for a click.
Your target cost per lead is derived from your own economics, not from a benchmark. Start with what a customer is worth in gross profit, decide what share of that you will give up to win one, then carry it back through every stage of your funnel to the cost per click you can afford and the budget needed to hit a deal target.
The calculator
What you can afford
- Target cost per lead, at your profit multiple
- $57.00
- Breakeven cost per lead
- $171.00
- Lead to customer rate, whole funnel
- 5.7%
What that means for media buying
- Target cost per click, at your landing page rate
- $2.85
- Leads needed for 10 deals per month
- 175.4
- Clicks needed
- 3,508.8
- Monthly budget required
- $10,000.00
If your close rate moves five points
Close rate is the input people are least certain about and the one the answer is most sensitive to. This is why a single target number is worth less than a range.
| Scenario | Close rate | Target CPL |
|---|---|---|
| 5 points worse | 25% | $47.50 |
| Your input | 30% | $57.00 |
| 5 points better | 35% | $66.50 |
Got a number you did not expect?
Usually that means one of the funnel rates is a guess rather than a measurement, and that is worth finding out before you plan a budget around it.
Talk it through with usMethod
How is the target cost per lead derived?
Gross profit divided by your profit multiple gives an allowable cost per customer, multiplied by the whole-funnel lead-to-customer rate.
The chain is short and it is worth understanding rather than trusting. Deal value times gross margin gives the gross profit a customer produces. Divide that by your profit multiple and you have the most you can spend acquiring one.
Then multiply the four funnel rates together, including the refund or cancellation rate, to get the proportion of leads that become retained customers. Multiplying the allowable cost per customer by that proportion gives what a single lead is worth to you, which is your target cost per lead.
The back-solve to cost per click is the part most calculators skip and the part a media buyer actually needs. Multiply the target cost per lead by your landing page conversion rate and you have the click price your economics support. If that number is below what your auction clears at, no amount of campaign management fixes it, and the tool says so rather than printing it flat.
Nothing here is a benchmark and nothing is invented. Every output is arithmetic on numbers you supplied, which is why the tool is only as good as your funnel rates. If those are guesses, the answer is a guess with more decimal places, and the honest next step is measuring them rather than refining the model.
Questions
What do people ask about target CPL?
Why gross profit rather than revenue, what profit multiple to pick, why four funnel stages, and whether anything is sent to us.
Why does this use gross profit instead of revenue?
Because revenue ignores what it costs you to deliver. A campaign optimised against revenue on a low-margin product loses money enthusiastically, and the loss is invisible in every ad platform report. Gross profit is the number you can actually spend a share of.
What profit multiple should I use?
That is a business decision about growth appetite rather than a marketing formula. A multiple of 3 means you want three dollars of gross profit for every dollar of acquisition cost. Companies funding growth from cash flow usually pick a higher multiple than those deliberately buying market share.
Why does it model four funnel stages?
Because most calculators model two, and the compounding is where the surprise lives. Four rates that each look reasonable multiply into a lead-to-customer rate that is often far lower than anyone expected, and that single number drives everything downstream.
Why is close rate singled out for a sensitivity table?
It is the input people are least certain about and the one the answer is most sensitive to. A five point move changes the affordable cost per lead enough to change media decisions, which is why a single target number is worth less than a range.
Does anything I type get sent to you?
No. The calculator runs entirely in your browser, there is no backend, and nothing is transmitted. The only way your numbers leave your machine is if you copy the shareable link and send it to someone yourself.
Numbers not what you expected?
That usually means a funnel rate is a guess rather than a measurement. Tell us what you are running and we will tell you which number to go and check first.