Cost per lead (CPL) translates as follows Contact compensation. This is a model that is predominantly used in the context of Affiliate marketing and other partner programs is used, and which is always used a commission is charged when a new contact (lead) is generated. For a qualified customer contact, the interest of the potential customer must be confirmed in a predefined manner. However, in contrast to the cost per order model, the customer must still no purchase operate. In the following, you will learn what exactly Cost per Lead is, how these costs are calculated and how high they should usually be for the advertiser.
What is meant by a lead?
Before we turn to cost per lead, the term lead should be clearly outlined. It is used in the Online Marketing and especially in the area of Affiliate marketing often used and means as much as Contact. The term is derived from the English "to lead", which means "to lead". Its use comes from the fact that in the case of a successfully generated lead, the potential customer or user is guided to the company's offer as part of the advertising measure.. So that the Lead can also be counted as such, the customer must take a specific, predefined action. This may involve signing up for a newsletter, registering in a store, or downloading an application. In this context, we also speak of a qualified lead.
The advertising measures that should lead to the generation of new leads are usually associated with costs or a certain budget. Here we are already approaching the question "Determine cost per lead - how much should your lead generation cost?", because the total costs for lead generation must now be allocated to the individual, actually generated leads, so that the result is the key figure cost per lead (CPL).
Calculation of the cost per lead
In order to be able to answer the question "Determine cost per lead - how much may your lead generation cost?", it must first be determined how the cost per lead is calculated in the first place. This calculation turns out to be very simple, because basically all that needs to be done is the cost of all leads is divided by the number of leads actually generated. For example, if exactly EUR 2,000 was spent on advertising measures whose goal was to generate 100 leads, that makes exactly EUR 20 per lead.
Cost per lead in practice
The CPL is usually used when a company commissions an advertising partner, such as an online marketing agency, to generate new contacts. Within the framework of the conclusion of the contract with the advertising partner, the remuneration model is determined. This can be, for example, cost per click, cost per order or the cost per lead discussed here. Usually, a fixed price is determined for each qualified lead or a total price for a certain number of leads.
The next step is the task of the advertising partner, with appropriate measures Ensure the generation of the contractually agreed leads. For this purpose, it has numerous options, which include, for example, classic advertising banners, Content marketing, social media entries and landing pages are available. For each successfully mediated contact ("qualified lead"), the customer subsequently receives the agreed remuneration.
In practice, cost-per-lead or cost-per-order billing models are always used when the focus is on interaction with a particular advertising medium and the contact is not always expected to result in the direct sale of a product.
The primary purpose of cost per lead or cost per order is usually to acquire new customer data.
This data can then be used, for example, for targeted acquisitions. This approach is particularly common for complex, consulting-intensive products such as insurance or innovations in the field of information technology.
In terms of qualifying individual leads, the cost-per-lead method is particularly useful for billing in email marketing, using contact forms, or downloading applications. Leads can be additionally qualified with Tracking methods linked which means that they can also be used in the area of affiliate marketing. Following a project, the data obtained in this way can be used to answer the question mentioned at the beginning, "How much should your lead generation cost?
The advantage lies in the fact that this way you can Better scale advertising measures can. Compared to similar models such as cost per order, you only pay for successful referrals, not for the measures or the advertising media used to generate the leads.
Determine cost per lead - how much should your lead generation cost?
Exactly how much leads should cost can only be approximated. The actual costs depend, for example, on how large the company itself is, which products are sold and which target groups are to be addressed by the measures. Added to this the cost of the advertising measures itself: A few targeted entries in social media cost less than, for example, an elaborately designed landing page with photo galleries, videos and plenty of data material. Decisive are The total cost of the marketing organization. Examples for this
- Creation of a marketing strategy
- Web development
- Content production
- Optimizations and SEO
- Agency costs
According to HubSpot's latest Demand Generation Survey, a lead currently costs just under EUR 170 on average across all industries. Significant upward and downward deviations are possible depending on the industry. The IT & Services sector currently has the highest cost per lead at around EUR 314. In the education sector, the costs are significantly lower, with an average of only EUR 55 per lead. In financial services, a lead costs EUR 230, and in the medical sector EUR 240. The question of average costs can therefore hardly be answered in a general way, but depends on many different factors.