Cost per lead is closely related to lead value, the last one of my top-3 lead generation KPIs. Value never exists without cost, nor vice versa. Lead value is critical for understanding how much you can spend on marketing, and offers a valuable indication about developments in your business.
By now, you should have the mindset that marketing and sales are in this together. To figure out your lead value, you need to dig fearlessly into both marketing and sales numbers.
From the marketing side, you’re interested in recurring revenue and customer lifetime value (CLV). Sales, on the other hand, can inform your calculations with, for example, the lead-to-customer ratio and average deal value.
There are different ways to reach your lead value, depending on which numbers you base it on. The important thing is that marketing and sales are on the same page and that the value is comparable with CPL. Once you have it calculated, lead value will determine the correct threshold for cost per lead.