Why you might be obsessed with cost per lead
CPL is one of the most reported metrics when judging campaign performance. It’s easy to understand and it gives you a good idea on how your campaign is running as well as the costs of your conversions. Running multiple campaigns with different strategies, audiences, and creatives could give you entirely different CPLs, and it’s tempting to assume that a campaign with a cheaper CPL is performing better when in reality this only tells you the cost of leads but not the real value.
Not all leads are created equal
Receiving a lead from someone submitting a form on your website doesn’t automatically indicate they’re a good prospect. Leads can come from people outside your target market, or for services you don’t offer indicating low-intent prospects. Your CPL might be on the low side, but if you’re seeing irrelevant leads, then is the cheap CPL really worth it? Generating fewer but more relevant leads can be much more valuable to the business, and paying more can sometimes lead to better results overall.
A simple example: £20 leads vs £50 leads
With a £2,000 spend, you might be looking to maximise volume of leads, and at the beginning of your campaigns, you might have used specific settings to achieve as many leads as possible. Ideally, you’ve figured out a stable CPL for your business but is it really telling you the quality?
Campaign A generates 100 leads at £20 each = £2,000 spend.
Campaign B generates 40 leads at £50 each = £2,000 spend.
At first glance, Campaign A looks significantly better, but if Campaign A produces 2 customers while Campaign B produces 8, the picture completely changes. The real question becomes cost per customer (conversion), rather than simply cost per lead. Of course, the next step is identifying the quality of these leads.
Lead quality should sit alongside lead volume
When running campaigns to obtain leads, it’s best not to optimise to generate the maximum number of leads as possible as this can point to increases in costs as accounts won’t have any defined guardrails to improve performance.
Consider whether your campaigns are reaching the types of customers the business actually wants to convert. Look at the keywords you’re targeting and ensure the search terms are correct. Negate any irrelevant traffic from the campaigns or accounts so you’re not spending on traffic that will never convert in the first place. If you’re already seeing cheaper CPLs, you’re most likely already doing this but it’s always worth looking at the search terms on the regular to see if the traffic that’s coming through is 100% accurate and relevant.
Other elements to focus on include revising your locations and making sure you’re targeting the right areas. We come across many accounts that target the UK as a whole, and although that’s fine, we would always recommend breaking the UK down by counties and then once you have enough data, you can then adjust and optimise bids based on locations. You might find that specific areas bring in better leads, so why not adjust location bids and increase your potential return.
Meta Optimisations
One of the ways to both decrease CPLs and increase volume is by using Meta’s Instant Forms instead of driving potential customers to your website. Instant Forms is a brilliant way to obtain new leads, with the option of connecting the form directly to a spreadsheet or your CRM.
The reason why Instant Forms are better comes down to a couple of different factors. People scrolling on social media don’t usually like to leave the platform to a website, so by using Instant Forms, you’re already alleviating that element. Instant Forms are also heavily customisable, meaning you can include every form field from your site into the form and you can apply more fields/questions to further qualify your audience.
Connecting the Instant Form to your CRM means you can carry on seamlessly without interruption. It’s worth noting that integrating it with a spreadsheet is also an easy way to see your new leads, but this is more of a manual process so it’s worth connecting to your CRM where possible.
Cheap leads don’t pay the bills, customers do
CPL is a useful metric but it should never be viewed in isolation. There are multiple factors to consider and focusing on obtaining a better quality of leads should always take priority. Whether it’s by looking at bidding strategies, adjusting location or ad scheduling bids, using instant forms and further qualifying your audiences, all of these should put you in the right steps to obtaining higher quality leads.
Ultimately, businesses should judge paid advertising on the quality and commercial value of the customers it generates rather than the CPL values that appear on platforms.
The next time your CPL falls, don’t just ask how much you’re saving. Ask whether those leads are actually turning into business.
Leave a Reply