Break-even cost per lead calculator.
Find the most you can pay per lead on Google Ads, Local Services Ads or Facebook and Instagram before a new customer stops being profitable, and the target that keeps the profit you want.
Average first job or order value.
After materials, labor, fulfillment and fees, before marketing.
Of qualified leads, how many buy. Use your CRM, not a guess.
Use 1 for first purchase only. Raise it only if repeat business is reliable.
The rest is what you are willing to spend to win the customer.
Break-even cost per lead
$400
Pay more than this per lead and each new customer loses money.
Target cost per lead
$200
Keeps 50% of gross profit per customer.
Break-even cost per customer (CPA)
$1,600
Gross profit per customer: the most you can pay to acquire one.
Formula: break-even CPL = revenue per customer × gross margin × purchases per customer × close rate. Bid toward the target, not the break-even line, and set Google Ads or Meta targets from booked customers in your CRM rather than platform-reported leads.
The method.
Most ad accounts are judged against a cost per lead someone picked from a benchmark. The number that matters comes from your own business: what a customer is worth in gross profit, and how many leads it takes to win one.
Gross profit per customer is the most you can spend to acquire a customer and break even. Multiply it by your close rate and you get the most you can pay per lead. Hold back the share of profit you want to keep and you have a target to set in Google Ads or Meta.
Use close rates from your CRM over the last few months, by channel if you can. Leads from search, Local Services Ads and Meta lead forms often close at different rates, so they deserve different targets.
About this tool.
- What is a good cost per lead?
- The one your margins can carry. A cost per lead is good when it is below your break-even cost per lead with room for profit, which depends on your customer value, gross margin and close rate rather than an industry average.
- How do I calculate break-even cost per lead?
- Multiply revenue per customer by gross margin to get gross profit per customer, then multiply by your lead to customer close rate. If repeat purchases are reliable, multiply gross profit by purchases per customer first.
- Should I use lifetime value?
- Only if repeat business is reliable and you can afford to wait for it. Bidding to lifetime value raises the cost you can pay today, which also raises the cash you need before the profit arrives.
- How do I use the target in Google Ads or Meta?
- Set Target CPA bidding near your target cost per lead, and import qualified leads or customers from your CRM as conversions so the platforms optimize toward people who buy, not just people who fill in a form.
- Is any of my data stored?
- No. The calculator runs in your browser and nothing is sent anywhere.
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