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True Trade Path

Calculator · Free

Lead Value Calculator

Find what a lead is worth, your max affordable cost per lead, and whether your marketing spend actually pays.

Job economics
$
48%

Revenue minus direct job cost, before overhead.

28%

Leads that become paying jobs.

$
Repeat business
35%

Expected value per lead

$323

Profitable at $65/lead. Max affordable: $148/lead.
Gross profit per job48% of $2,400
$1,152
Lifetime lead valueIncluding repeat business
$492
Cost per acquisition$65 ÷ 28% close rate
$232
ROI per lead
396%
Break-even close rateMinimum close rate at this CPL
5.6%
Monthly marketing economics
MeasureAmount
Leads per month25
Monthly lead spend$1,625
Expected gross profit from leads$8,064
Net marketing margin$6,439
Max affordable cost per lead$148

Each lead returns $258 in expected gross profit

At 28% close rate, $65/lead costs $232 per acquired customer against $1,152 gross profit per job. You can afford up to $148/lead and still hit 30% acquisition cost target.

What this assumes

  • Gross margin is revenue minus direct job cost, before overhead allocation.
  • Close rate is leads that become paying jobs, not appointments set.
  • Repeat business multiplier uses your entered repeat rate and average repeat jobs.

Important

A lead worth $200 at 30% close rate means you can afford $60 per lead, not $200. Spending more than your max affordable CPL burns cash even when the phone rings.

Understanding the result

A lead is worth less than a job

A $3,000 job at 45% gross margin yields $1,350 gross profit. At a 25% close rate, each lead is worth $338 — not $3,000. That is the most you should spend to acquire it and still break even on marketing.

Close rate is the lever most shops ignore

Improving close rate from 20% to 30% increases lead value by 50% without spending another dollar on marketing. Faster follow-up, better reviews, and professional estimates move close rate more than a bigger ad budget.

Repeat customers change the math

A customer who calls back for three jobs over five years is worth three times a one-time lead. Maintenance agreements and follow-up campaigns increase lifetime lead value and justify higher acquisition cost.

Common questions

How much is a contractor lead worth?
Lead value = average job gross profit × close rate. A $2,500 job at 50% margin with 30% close rate: $1,250 × 0.30 = $375 per lead. That is the expected value before marketing cost.
What should I pay per lead?
Spend no more than 20 to 30% of expected lead value on acquisition. A lead worth $375 supports $75 to $112 cost per lead. Above that, you need higher close rates, bigger jobs, or better margins to profit.
What is cost per acquisition for contractors?
CPA = cost per lead ÷ close rate. A $50 lead at 25% close rate costs $200 per acquired customer. Compare CPA to gross profit per job — if CPA exceeds gross profit, the marketing channel loses money.
What is a good close rate for contractor leads?
Residential service contractors close 25 to 40% of qualified leads. Below 20%, fix follow-up speed, estimate quality, and reviews before spending more on ads. Above 40%, you may be underpricing or cherry-picking.
How do I calculate marketing ROI for my contracting business?
ROI = (revenue from channel − marketing spend) ÷ marketing spend. Track leads by source (Google, referrals, yard signs). A channel spending $2,000/month that generates $8,000 in gross profit at 50% margin returns 100% ROI.

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