How Much to Charge Per Lead | Pay Per Lead Simple Calculation 2020

How Much To Charge Per Lead With the Pay Per Lead Model

The lead generation business is growing by the day, and Flexxable's Pay Per Lead model has become a bit of a revolution. (Not to brag, or anything).

But as more people jump the retainer contract ship, they find themselves a little lost. How much should they charge per lead in their industry? Is there a way to work it out, or does it all come down to experience?

I get it. You don't want to plug away for months, only to find you're making half the profit you could.

Truth is, every industry is different, and there's no one-size-fits-all answer. That said, we have a cheeky little method to figure out what to charge per lead for the pay per lead industry. Use it as a general rule of thumb, and it should point you in the right direction.

The simple calculation goes like this:

Work out the Average Order Value (AOV) of the customer. E.g. a converted client could be worth £3000 in a particular industry.

Divide the AOV by 3. (3000/3 = 1000).

Figure out the 5% conversion rate (5/1000 x 100 = 0.5. That's £50).
And lo and behold, you've got your cost per lead. In this case, £50.

This is a straightforward calculation to get you started. We use this very same method at Flexxable, and so far it hasn't caused us any problems. Remember, this is just a ballpark figure, but it's a great way to figure out how much your services are worth.

Still having trouble? Comment below, and we'll help you work out your cost per lead in a jiffy.

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ABOUT THE CHANNEL: Welcome to Flexxable. My name is Dan Wardrope and I am a Pay Per Lead, Lead Generation Specialist. Over the last ten years I have trialed and tested many methods when It comes to lead generation. Through my years of struggles I have developed a lead generation technique that has helped me take my agency to the next level.

I firmly believes that lead generators have one job: to deliver volumes of high-quality leads. No more. No less.

My mission is to help more than 1000 entrepreneurs make $100k a month. I want to deliver the best Pay Per Lead training on the planet, and I LOVE watching businesses overcome barriers and make massive progress.

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[WinstonBromley]

Another quality video with so much solid information in a short period of 3 minutes and 50 seconds on lead generation. I am in the course and love watching these videos, as there are always little things said that remind me of how great it is (and give me more insight). Thanks Dan and Flexxable.

[MrScottSenior]

Is this applicable for a 'grandfather' model?

[andrew-isac]

May i ask u if that strategy applies to number of leads on a list like through digging info & scrapping for excel sheet ?

Or when we connect & make connection direct for the client & ensure that connection with that potential-lead. ?

[creativemarketing]

do you decide on the conversion percentage bvefore you take on the client or after. Reason I ask is cause would it be hard to know what the % would be until you start running campagin?

[daddydullah]

Great Vid! I just had a question and was wondering if you could answer it. So basically in my niche which is chiropractors the average life time value of a lead is around $600. And with the method you are using to calculate the price the client should be paying for lead breaks down to be $10, Is that what it is suppose to come down too? Would appreciate a response. Thanks.

[jay_who]

What's the divide by 3 figure based off? Why is it 3?

[dannybhoy]

Hi Dan, just a quick question - I'm assuming when you're talking about the 5% conv rate, that you are meaning that is the number of leads you expect your client to convert into a sale, correct? Assuming so....but I'm just checking so I can rule out that 5% being the WEBSITE conversion rate. Thanks mate

[iamalphajallow]

Hello Dan, need your help here, I’m potentially landing my first client as an yoga instructor, she asked me the average cost price per lead, how much do you think that should be. And why do you specifically divide it by 3?

[jobrown]

Calculation can be simplified by just diving AOV by 60, correct?

Also, you said Average Lifetime Value once in the video, did you mean to say that, or is it Average Order Value?

[StevenRueschDE]

This kind of math is a good yardstick, which one can follow.

For my clients in the real estate world, this works fine.

Of course, if you have clients like roofers or contractors who have much higher costs involved in each project, this would have to be calculated differently.

My guess would be estimate what their fixed cost per project is (materials and so on) and factor that out before applying your math.

[Indigoway]

I am looking for a pay per lead - lead provider if you know any good ones for B2B ?

[joannesbartholomew]

I personally feel that the cost per lead should be further derived from the Lifetime Value (LTV) and the Customer Acquisition Cost (CAC). Reason being, for lower margin items, this system might not work.
The number is based on a general assumption of 33% profit margin, but for smaller ticket/margin items such as dropshipping or middle man trading, the cost per lead could be too high?
So if it were to be a rule of thumb, it should highly depend on the CAC (derived from LTV) in order to remain profitable. Does this make sense?

[stefanutzariens]

Who is covering the ad spend in this scenario? Thanks

[diegocaracasfc]

Hi, Dan I have a question: How can I know the AOV of a client that charge <$100 for an initial consultation, and then depending on whether the client decides to hire their packages or no, a client might worth those <$100 or $1000 for a year? I mean is there a way to know on average how much a client is worth without contacting the customer directly? I'm talking about the nutrition industry. Thanks

[chris_ea]

Do you define the cost per leads the the price per lead?

[Koda]

When I do the math I get $2 dollars per lead

This is for a chiropractor in California

Sounds to low because cost per click on google says $5

Should I match or go with the calculation

[evanparcon]

Can someone pls tell me what does it mean by a lead here? How is it being qualified and what the lead source from? 🤔

[KarmaLodroSenge]

So with the $1200 / $400 / $20 per lead figure you have there....is that you saying that you are charging the client $20 per lead on delivery of that lead, or the sale of that lead, if they make a sale from that lead?

[kasforai]

Should I just ask customers what lead is worth for them?

[hanifkazi]

I want to do bulk order for ppl as i own web traffic agency to provide quality leads for my clients. i serve to mmo, wfh, im, mlm marketers niche. please help.