Cost Per Lead by industry

As a business owner, you must be aware of data-backed decision-making for marketing. If your business is dependent on leads and you would like to know more about the average cost per lead then you have come to the right place.

In the highly competitive marketing world, any insights you can get about lead generation cost can add great value in decision-making, budgeting and forecasting.

It's not just about throwing money at campaigns and hoping for the best – it's about knowing exactly how much you're investing and what kind of return you can expect.

So, let's break it down. What exactly is average lead cost, and why does it matter? CPL is the average amount of money one needs to spend to acquire a single lead. Whether you're in the home service industry, tech, healthcare, or e-commerce, knowing this number is crucial for optimising your marketing budget and maximising your ROI.

The next question is "How do I determine my average lead cost?" By analysing data from various industries, we can identify trends, patterns, and benchmarks that shed light on what constitutes a "good" CPL for your business.

With the knowledge of these two parameters, you can fine-tune your marketing strategies, allocate resources more effectively, and ultimately, drive better results for your business.

In this guide, we’ll cover the goldmine of all parameters- Average Cost per Lead (CPL) by industry. Let's dive in and uncover the secrets of average lead cost by industry!

[Cost per lead calculator is coming soon]

What is the Average Cost Per Lead (CPL)?

We are now armed with a broad knowledge of an average lead cost, we must define it and learn how to calculate it for your business.

Average Cost per Lead (CPL) is the metric used to calculate the average amount of money a business invests to acquire a single lead. It's the price tag attached to each potential customer who expresses interest in your product or service.

Now, calculating CPL involves dividing the total marketing spend by the number of leads generated within a specific period.

For example, if a business invests $1000 in marketing efforts and generates 100 leads, the CPL would be $10 ($1000 / 100 leads = $10 CPL). This simple formula provides a clear picture of how much it costs to attract and capture the attention of potential customers.

Knowing your average lead cost directly relates to your lead generation efficiency.

A low CPL indicates that your marketing efforts yield a high volume of leads at a relatively low cost, indicating great efficiency. On the other hand, a high CPL may suggest that adjustments are needed to streamline your strategies and improve performance.

In essence, Average Cost per Lead is not just a number – it's a strategic tool that empowers businesses to make data-driven decisions and optimise lead acquisition.

Average Cost Per Lead (CPL) by Industry

Let’s dive into the common average lead cost’s seen across industries.

The following data was sourced from Statista and collected in United States during 2021 and 2024, the figures are in US dollars.

Industry	Paid Channel CPL	Organic Channel CPL
Higher Education	$1261	$700
Financial Services	$760	$555
Fintech	$490	$410
Legal Services	$780	$510
E-commerce	$100	$83
Industrial Internet of Things (IIoT)	$600	$400
Manufacturing	$700	$415
Software Development	$680	$510
Oil & Gas	$770	$500
Transportation & Logistics	$670	$500
IT & Managed	$617	$385
B2B Saas	$310	$165

Key factors influencing Cost Per Lead (CPL)

Understanding the factors influencing Average Cost per Lead (CPL) is essential for devising effective marketing strategies and maximising your ROI. Let's dive into the key elements that shape CPL and explore how they impact your lead acquisition efforts.

Cost Per Click (CPC)

A higher CPC means you need to pay high to get a click and generally on average you need several clicks before a customer will convert. If your CPC is high then you will have to pay a much higher to acquire a lead resulting in a higher cost per lead.

From Google Ads' point of view, the selection of the right keywords is the key to ensuring you get the best return for your spend. Generally, generic keywords can consume a significant portion of the budget quickly resulting in high cost per lead hence you need to be careful while selecting the right keywords.

If you may be running Facebook Ads, it is worth assessing the CPC cost though you pay by the impression.

Average CPC by Industry

Let’s look at average cost per click (CPC) for some industries. This data helps to benchmark the CPC for Google Ads Search advertising.

Industry	Average CPC (Search)	Average CPC (GDN)
Advocacy	$1.43	$0.62
Auto	$2.46	$0.58
B2B	$3.33	$0.79
Consumer Services	$6.40	$0.81
Dating & Personals	$2.78	$1.49
E-Commerce	$1.16	$0.45
Education	$2.40	$0.47
Employment Services	$2.04	$0.78
Finance & Insurance	$3.44	$0.86
Health & Medical	$2.62	$0.63
Home Goods	$2.94	$0.60
Industrial Services	$2.56	$0.54
Legal	$6.75	$0.72
Real Estate	$2.37	$0.75
Technology	$3.80	$0.51
Travel & Hospitality	$1.53	$0.44

Data source: WordStream

Competition in your industry

Cost per lead (CPL) is directly linked with competition.

If you are in a highly competitive niche, then the cost of acquiring leads will be higher. This is primarily due to other businesses competing for the same ad spot.

Generally speaking, the higher the competition the more you need to pay to acquire clicks leading to leads. Intense competition can boost the CPC cost significantly - thanks to automated bidding and the race to rank higher in Google Ads or limited placement in Facebook Ads.

How does competition impact CPL?

• Higher Advertising Cost: In a competitive industry, businesses need to pay more to get their ad placed in front of potential customers, such as Facebook Ads, or they need to pay more for each click, such as Google Ads.
• Higher Impression or Clicks Needed: When users have more choices, they may shop around for better deals impacting the CPL.

Landing page experience

Landing page optimisation boosts conversion resulting in lowering the cost per lead.

Your landing page is the digital handshake between your brand and potential customers. It's where curiosity meets conversion, and where a well-crafted experience can make all the difference in your Cost Per Lead (CPL) metrics.

Creating compelling landing pages ripe with information and call to action will aid in decreasing the lead cost.

Optimising landing pages for mobile first with clear messages, seamless experience from Ads to the page with persuasive content and visual media can improve conversion rate to return higher return on investment (ROI).

Not to forget quality landing page experience impacts quality score in Google Ads.

Trust & social validation

In an age full of options, consumers gravitate towards brands they trust. From transparent communication to delivering on promises, every interaction contributes to trust. After all, would you share your personal information with a brand you don't trust?

Trust can be demonstrated in the form of high-quality content on the website, with case studies, certifications, training etc.

Imagine you are a local “heating and cooling service provider”, case studies of how you solved customers' problems can give your prospects a strong boost that you can do the same for them.

Similarly, social validation like real user experience reviews and testimonials can boost your prospect's confidence significantly to not only enquiry but to give you the job.

Offer & promotions

You would be a fool in this day and age to reject a good deal. By offering some good offers, you can boost your conversions and reduce the cost per lead. Buyers will be prompted to visit your site at least and check out the steal deal.

While crafting offers, keep in mind to offer true value, and avoid misleading messages and hooks that may create poor user experience.

The quality and relevance of your offer play a crucial role in determining average lead cost. A compelling offer that addresses the pain points and needs of the target audience is more likely to generate leads at a lower cost.

Conversely, if your offer is generic, unappealing, or irrelevant to your audience, CPL may increase as you struggle to capture their interest and engagement.

Target Audience

One of the most significant factors influencing average lead cost is your target audience. Demographics, interests, and behaviours of your ideal customers play a pivotal role in determining the cost of acquiring leads.

Highly niche or specialised audiences may require more tailored and targeted marketing efforts, driving up CPL. Conversely, broader audiences with widespread appeal may yield lower CPL due to higher volume and efficiency in lead generation.

Example: If you are a cosmetic clinic business and your business helps both males and females with skin rejuvenation treatment but your majority of customers are female then you need to tailor your marketing spend accordingly to get the best cost per lead.

Marketing Channels

Different channels – such as social media, search engine marketing, email marketing, and content marketing – offer varying degrees of cost-effectiveness and lead quality.

For example, while paid advertising on social media platforms may offer quick visibility, it can also come with a higher average lead cost compared to ads/organic search traffic or email campaigns. Understanding the strengths and limitations of each channel is essential for optimising average lead cost and maximising your marketing budget.

Focusing on low-hanging fruits like- retargeting can generate leads at low cost and significantly reduce the CPL.

Conversely, if you are launching ads in highly competitive channels, it can drive up CPL.

Season

There is seasonality in your buyer’s purchase decision. Understanding these parameters from past lead data or order data can help you optimise and run ads in peak seasons.

Taking a similar example as mentioned above of ducted heating and cooling service - the demand increases significantly in Australia when it's either very cold or very hot as users find their system not working properly and they find it hard to live in the house without proper heating and cooling.

Another example: You sell baking products, even though the industry has fair demand throughout the year, during spring and autumn the supplies are usually in great demand. You can capitalise on this and run campaigns in those seasons.

If your business is impacted by season then you should have data and resources to make the right decision on marketing to reduce the cost per lead and boost the revenue.

Conversion Rate Optimization (CRO)

Marketing efforts are never to be “Set & Forget”, regular campaign monitoring, analysis and changes can help boost the conversion and reduce cost per lead.

Conversion Rate Optimization (CRO) efforts can directly impact the average lead cost. The process includes optimising landing pages, calls to action, Ads and campaigns.

You can increase conversion rates and reduce the cost per acquisition. A higher conversion rate means more leads generated from the same marketing investment, effectively driving down CPL and maximising ROI.

It’s a multiplier effect with CRO you have more customer base and consequently more people to retarget. This lowers the cost of leads and also creates a loyal customer base.

How to reduce Cost Per Lead (CPL)?

Reducing Average Cost per Lead (CPL) is a top priority for marketers looking to maximise their return on investment and drive greater efficiency in their lead generation efforts. Here are some actionable tips:

1. CPC: Work on reducing your CPC by avoiding bidding on generic keywords or other methods. Related: Learn how to reduce Google Ads cost.
2. Higher Competition Strategy: You need to have clear dos and don'ts if you are in a very competitive niche like avoiding bidding on generic keywords, running ads during specific times, assessing your competition etc.
3. Landing Page: Build a next-level landing page experience, avoid friction and display all they need to convert.
4. Build Strong Reputation: A positive online reputation showing trust and social validation with reviews can boost your lead and reduce the cost greatly.
5. Be Competitive: A good deal has the potential to boost the conversion rate. Assess your competition and have a matching or better offer based on your business circumstances.
6. Target Right Audience: This is particularly true with Facebook Ads, you must target the right audience to ensure your budget is allocated correctly to achieve the best outcome possible.
7. Right Marketing Channel: Choosing the right marketing platform is critical to ensure you advertise where your users are more likely to convert. Do not rely on just one channel, have multiple sources of lead generation like Google Ads, SEO, Facebook Ads etc, this process will give you the opportunity to focus on the channel where you can get minimium cost per lead.
8. Season Planning: You must plan your peak and off-peak season to get leads consistently. A higher budget and resources during peak season or as required.
9. Don’t Set and Forget: Marketing is never about setting and forgetting. Regular monitoring and applying necessary changes to keep your campaign relevant and get leads at the least possible cost.