Cost per lead vs. cost per booking: the number that matters

4 minute read

Cost per lead is the number most agencies report, because it’s easy to make look good. But a cheap lead that never answers the phone costs you more than an expensive one that books.

Two businesses, same ad spend

Business A spends $2,000 and gets 100 leads at $20 each, but only 5 book: a cost per booking of $400. Business B spends $2,000 and gets 50 leads at $40 each, and 15 book: a cost per booking of about $133. Business B’s leads look twice as expensive, yet each customer costs a third as much.

What changes cost per booking

• Lead quality: filtering out fake and junk leads before your team calls them
• Speed: replying in under a minute instead of hours
• Follow-up: reaching out more than once before giving up
• Feedback to the ad platforms: sending bookings back so the ads learn which people actually buy

What to ask your agency for

Ask for three numbers every month: cost per lead, booking rate and cost per booking. If your agency can only show the first one, you’re not seeing the full picture.