Formulas
- Cost per lead (CPL) = marketing spend ÷ leads
- Customer acquisition cost (CAC) = marketing spend ÷ new customers
- Maximum CPL to break even = average sale × margin × conversion rate
Example
$3,000 brought 300 leads: a CPL of $10. With 5% of them buying, that is 15 customers and a CAC of $200. At $400 per sale and a 50% margin, the gross profit is $3,000: the campaign breaks even on the first sale, and the maximum CPL is exactly $10.
Frequently asked questions
What is a lead?
A potential customer who left contact details, for example by filling in a form or sending a message.
What if customers buy more than once?
Then compare CAC with the customer’s lifetime value (LTV). A CAC up to a third of the LTV is a common target.
How is this different from CPA?
CPA usually means cost per sale or action. See the <a href="/cpa-calculator/">CPA calculator</a>.
See also
Results are estimates for information only and are not financial, legal or medical advice. Rates, taxes and fees vary — confirm with a professional or your lender.