Measuring Marketing

Chapter 30 Cost Per Lead

Measurement Need

Marketers need to measure the cost of acquiring customer leads as it helps determine if their customers are profitable.

Solutioni

Cost per lead (CPL) measures the cost paid to acquire each lead. A lead can be anything from an e-mail address to a complete customer profile, including name, company, job title, and all corresponding contact information. The CPL will increase as more detailed information is sought. Determining CPL requires knowing the costs underlying the total advertising costs (TAC), represented by the following:

$CPL=\frac{TAC}{TLG}$

Where

CPL = cost per lead

TAC = total advertising costs

TLG = total leads generated

TAC is comprised of direct advertising costs (DAC) and indirect advertising ...