Break-even cost per lead calculator
This calculator needs JavaScript. The formula and the worked example on this page show how it works.
Measured over all delivered leads, including leads later returned.
Optional. Leave blank to find the break-even point.
Optional. Share of delivered leads returned for credit.
Result
Enter a value above 0 in each field.
Formula
Break-even cost per delivered lead = (average profit per client - target profit per client) x close rateClose rateThe share of leads worked that become closed deals, such as sold jobs or signed cases. Glossary
Effective cost per delivered lead = cost per lead x (1 - returnReturnA buyer's request for credit on a lead that fails agreed standards, such as a disconnected number, a duplicate or a lead outside the filters. Glossary rate), so the most you can pay per lead before return credits = break-even cost per delivered lead / (1 - return rate)
How to find your break-even cost per lead
Each lead earns, on average, the profit per client multiplied by the chance that it closes. That figure is the break-even cost per lead: pay less and each lead adds profit on average, pay more and each lead loses money on average.
Most businesses want to keep some profit from each client, not only break even. Enter a target profit per client and the calculator subtracts it before multiplying by close rate. The result is your maximum cost per lead at that target.
Returns change what you actually pay. This page uses the same convention as the lead cost calculator: effective cost per delivered lead = cost per lead x (1 - return rate). Working backward, the most you can pay per lead before return credits is the break-even cost per delivered lead divided by (1 - return rate). How credits work is set by the agreement between buyer and seller. At Summit Leads, return terms are agreed during onboarding.
Example (made-up numbers)
$1,000 average profit per client and a 10% close rate: $1,000 x 10% = $100.00 break-even cost per delivered lead.
Keep a $500 target profit per client: ($1,000 - $500) x 10% = $50.00 per delivered lead.
With a 20% return rate: $50.00 / (1 - 20%) = $62.50 most you can pay per lead before return credits. Check: $62.50 x (1 - 20%) = $50.00.
How to use the break-even cost per lead calculator
- Enter your average profit per client: revenue from a client minus the cost of serving them, before what you paid for the lead.
- Enter your close rate as a percentage. If you also enter a return rate, measure close rate over every delivered lead, including leads later returned.
- Optionally enter a target profit per client. Leave it blank to see the true break-even point.
- Optionally enter a return rate: the share of delivered leads returned for credit.
- Read the results as you type, then use Copy result or Clear inputs.
How to read the result
Break-even cost per delivered lead is the most each delivered lead can cost you after return credits. Compare it with your effective cost per delivered lead from the lead cost calculator.
Most you can pay per lead before return credits appears when you enter a return rate. Compare it with the price a seller quotes. It is higher than the first figure because some of the leads you pay for are credited back.
A result close to the price you pay leaves little room for a drop in close rate. Recalculate when your close rate, profit per client or return rate changes, and use the lead value calculator to see what each lead is worth in revenue.
Common break-even cost per lead mistakes
- Using revenue instead of profit. Revenue per client makes the ceiling too high. Use what a client leaves after the cost of the work.
- Counting return credits you do not have. Only enter a return rate that your agreement with the seller supports, measured from your own returns.
- Using the best month's close rate. Use an average over enough leads to be steady, or the ceiling will be too high in an ordinary month.
- Forgetting the cost of working leads. Staff time to call and follow up is part of the cost of serving a client. Include it in the profit figure.
Embed this calculator
You can add this break-even cost per lead calculator to your own site. Copy the code below and paste it into your page. It loads the calculator in a frame and includes a credit link to this page.
Frequently asked questions
How much should I pay per lead?
Less than your break-even cost per lead: average profit per client times close rate. Subtract a target profit per client first if you want each client to leave profit after the lead cost.
What is the maximum cost per lead?
It is (average profit per client minus target profit per client) times close rate. With no target, it is your break-even cost per lead.
How do return credits change the break-even point?
Credits lower what you pay for each delivered lead, so you can accept a higher price before credits. Divide the break-even cost per delivered lead by one minus the return rate. Credit rules are set by your agreement with the seller.
Related tools
Know your maximum cost per lead?
Summit Leads delivers exclusive MVA and home improvement leads in all U.S. states, with return terms agreed during onboarding. Email us your states, filters and volume.
Or write to team@summitleads.ai. We reply by email.
What happens next
- Step 1: You email us.
- Step 2: We reply by email.
- Step 3: Return terms are agreed on the onboarding call, before you go live.
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