To run your business sustainably and grow it, you need a consistent stream of potential customers. How much does it cost to generate these leads, though?
It entirely depends on what channels and tactics you use, and additional factors can often affect those, too.
So, to help you find the right lead generation strategy for your goals and budget, I’ll show you the most popular ones, their average cost and… ONE tactic to get the most out of ALL of them!
Understanding the cost of lead generation
First of all, what exactly do we mean by “leads”?
A lead is someone who expressed an interest in your business, product or service and shared their contact details with you (for example, by signing up for your lead magnet).
To calculate the cost of your lead generation, you must divide your marketing spend by the number of leads it brought you:
marketing spend ÷ new leads = cost per lead (CPL)
You can do this with your entire marketing spend or, if you want to assess the effectiveness of a specific strategy, per channel.
For instance, let’s say you spent $2000 on Facebook ads and got 500 sign-ups. The CPL of that campaign is $4 ($2000 ÷ 500).
Main factors influencing the cost of leads
You can expect completely different CPLs depending on a wide range of factors, but these tend to be the biggest ones:
- Industry – Some sectors and markets are more competitive than others when it comes to lead generation. For example, the average CPL for the management consulting industry is over double that of SaaS
- Lead quality – The more relevant and specific your leads are, the more money they tend to cost. Remember that a lead isn’t a paying customer (yet!). You’ll still need to nurture them, speak to them on a call or direct them to the best product for them. So, it’s important to put quality before quantity and focus on relevant leads. Otherwise, you could end up wasting money collecting contact details of people who are NEVER going to become customers
- Choice of channels and tactics – There are lots of platforms and strategies for lead generation. Some of them are more expensive but will bring you results faster. Some of them are cheaper but you might need to be more patient. On top of that, there are many platform-specific factors that will affect your final CPL, too (don’t worry: we’ll walk you through all the main ones!)
Key channels for lead generation and their average costs
So, how much does it cost to generate leads with these popular strategies and channels? Let’s look at them one by one.
Paid digital advertising
This lead generation strategy consists of paying to display your ads in front of your target customers, whether that’s on search engines or social media.
Google Ads
With these pay-per-click ads, you get to show up in front of your audience by targeting the keywords they’re googling and bidding for them.
Google Ads are especially used for transactional keywords: those searched by people who are looking to buy a new product or service (for example, if you offer accounting services, a good one for you could be “accountants in London”). So, make sure your ad takes them to a strategic page with a compelling contact form to capture their details.
Alternatively, you could also target informational keywords (like “How much money can an accountant save me?”) and then offer a relevant lead magnet in exchange for their email address.
Average Cost Per Lead: $53 (but it can easily range between $20 and $100+)
Main factors influencing this CPL:
- Industry – What are you selling and to whom? For example, a PPC ad for a clothing brand will be cheaper than one to sell cars
- Keywords – Some are more popular (and therefore expensive) than others. This means that, if many of your competitors are targeting the same keyword, you’ll need to bid more money for it
- Quality score – This ranges from 1 to 10 and is based on a combination of factors (like how relevant your content is to that keyword or how good your landing page experience is). So, for a lower CPL, create the best and most useful content for the person googling that specific keyword
- Geographic targeting – You can choose to only show your ads to users in one area, several cities and so on. Overall, the wider the range, the higher your ad cost
Facebook Ads
Does your target audience hang out on Facebook?
Then, stop their scrolling and capture their contact information with a compelling ad (for example, one that offers them a valuable free resource, like a quiz lead magnet).
Average Cost Per Lead: $8.36
Main factors influencing this CPL:
- Bidding strategy – You can opt for spend-based or goal-based bidding. With the former, Facebook will use your entire budget to maximise your results. With the latter, you can set a specific cost or value (like a conversion rate) that you want to achieve. Either way, this can influence your ad spend and, consequently, your CPL
- Targeting options – From locations to how competitive your market is, who you’re trying to reach can bring your CPL up or down, too
- Quality score – Like Google, Facebook scores your ads out of 10. This is mainly based on how relevant and useful your content is for your target audience
- Time of year – Your advertising costs can also go up during certain seasons, holidays or even industry-specific events (for example, Facebook ads tend to be more expensive around Black Friday)
- In-house or outsourced – You can run your own Facebook ads, but to avoid wasting money, you must have the right knowledge and resources. For instance, you’ll need the perfect combination of written copy and visuals to grab your audience’s attention. So, if you haven’t got a copywriter or designer, it might make more sense to pay an external agency
- Split testing – Since Facebook ads are very visual, it’s wise to run them as different combinations of copy and images or videos. After A/B testing them, you can save money by only focusing on the one that performed best
LinkedIn Ads
LinkedIn is responsible for over 80% of all B2B leads. So, if you have a B2B company and want to target people who are already in the mindset of doing business, it might be one of the best channels for you.
As well as using it to share organic content, you can get more leads faster by running LinkedIn ads.
Average Cost Per Lead: $10 – $30
Main factors influencing this CPL:
- Formats – The most common type of LinkedIn ad consists of sponsored content: (think of it as a boosted post that can reach a lot more people. However, you might also want to consider sponsored messaging (that shows up in your audience’s DMs), pre-filled lead gen forms or smaller text ads that appear on LinkedIn’s right rail
- Professional platform – LinkedIn is a platform full of people looking to do business. So, its CPL tends to be higher than other PPC channels
- Targeting options – From job titles to industry and competition, these can also have a big impact on your overall CPL
- Quality score – Like Google and Facebook, LinkedIn prefers showing engaging and relevant ads to its users. So, if yours is perfect for your chosen audience, your CPL will probably be lower
Content marketing
This organic marketing and lead generation strategy consists of creating valuable content for your target audience. The goal is to attract them and get them to interact with your brand until they’re ready to buy from you.
Unfortunately, it’s trickier to track the CPL of content marketing!
For example, someone might have found out about your company through a specific blog post. However, they weren’t ready to take action, so they bookmarked your website and left. Then, they opened it again a few days later and got in touch. So, even though that lead won’t show up in your metrics, you actually got it thanks to your initial blog post.
That’s why, when you have a strong content marketing strategy, its ROI will probably be higher (and the cost per lead lower) than what you can measure.
With that in mind, let’s look at the main content marketing channels and their average CPL.
Blog posts
This is a fantastic tactic to get more people on your website in the first place.
You write articles that answer your audience’s questions, and you optimise them for the keywords they’re searching on Google. For example, a business coach could publish blog posts along the lines of “Am I ready to invest in a business coach?” or “7 benefits of working with a business coach”.
Then, use a strong lead magnet as your main call to action (like a compelling quiz that offers personalised results) to turn your blog readers into leads.
Average Cost Per Lead: $0-$140
Main factors influencing this CPL:
- In-house or outsourcing – If you write your own blog posts, the cost will be virtually zero (although, technically, you’re still investing your own time). Alternatively, you can choose to outsource them to a freelance writer or opt for a fully managed agency retainer
- Content complexity – Will you also need visuals like images, infographics and videos? And how long will your blog posts be? For example, outsourcing a short and simple article will cost you less than a long one that requires interviews with subject matter experts. However, if the latter brings you more sign-ups, your cost per lead could then end up being lower
- Frequency – Blogging more often can bring your outsourcing costs up, but it can also attract more leads
- SEO – Most writers and agencies will also charge you a bit more to include keyword research and SEO in your blog posts
Video content
This format (and especially short-form video) is becoming more and more popular online.
You can easily use videos to generate leads across different platforms, from YouTube to Instagram and even beyond social media.
While this versatility is fantastic, keep in mind that it also makes it harder to measure the CPL of videos.
Average Cost Per Lead: $0-$288
Main factors influencing this CPL:
- In-house or outsourced – You can start sharing videos using nothing but your phone and a free editing app (so, zero costs). However, to scale, streamline and optimise your video creation, you might want to work with an editor or outsource everything to a full video team
- Content complexity – How long are your videos? Will you need to factor in additional costs, like travel, props or the input of a guest or subject matter expert? This can all affect your overall cost and, consequently, CPL
- Repurposing – If you only use each video once, your CPL will probably be higher. But if you keep repurposing it (for example, by posting it on several platforms and resharing it regularly), it’ll easily go down
Podcast
This is another interesting format to offer value to your audience while showcasing your personality and knowledge.
Just like with the other content marketing tactics, it’s hard to calculate the CPL of a podcast. For example, someone might discover your brand through an episode, listen to a few more and then go straight to your website and get in touch… but you won’t necessarily know that they came from your podcast!
Still, to generate more leads, you could mention your lead magnet (hint hint: your compelling quiz) at the end of each podcast episode and even include it in your descriptions.
Average Cost Per Lead: $0-$140
Main factors influencing this CPL:
- Equipment – Much like with videos, you could get started virtually for free. If you need new or better equipment, though, this could range from $20 to +$5000
- In-house or outsourced – If you have enough time and resources, you can do everything yourself. Would you rather outsource your podcast production? Scale it with additional marketing and collaborations? Then you might need to budget for $5000-$20000 per year
- Content complexity – Episode duration, audio-only or video, whether it’s only you or you’re inviting guests… All this can also affect your costs and, therefore, your CPL
Social media
This brand awareness and lead generation strategy is about engaging with your target customers on their favourite platforms and creating valuable content for them.
Of course, it’s not always easy to tell if a new lead or sale has come from your social media posts. Just like with blogs and podcasts, someone might have found out about you thanks to your posts but then opened your website separately and signed up for your lead magnet.
Still, social media is a fabulous strategy to reach a lot of new potential customers!
Average Cost Per Lead: $0-$82
Main factors influencing this CPL:
- In-house or outsourced – You can run your own social media profiles for free, outsource some elements of your content creation (to freelancers or agencies) or even the entire management of your accounts. So, depending on what you opt for and what’s included, your costs could range from $500 to +$5000 per month
- Content complexity – Do you need the help of a copywriter? How about custom photos, graphics and videos? For example, some platforms are more visual (like Instagram and TikTok), so you’ll probably need to factor in a higher budget when outsourcing them
- Levels of support – If you want to outsource your engagement too (for example, by paying someone to reply to comments and DMs on your behalf), that’ll also influence your CPL
SEO and organic search
If you optimise your website for SEO and target the right keywords, you can help your audience find it when they’re looking for your types of products or services.
Then, as well as directing them to the best one for them, make sure you have a strategy to capture their contact information.
For example, through pop-ups and banners, you could offer them a compelling quiz lead magnet that’s impossible to miss.
Average Cost Per Lead: $0-$47
Main factors influencing this CPL:
- In-house or outsourced – You can learn the basics yourself, or you might already have a skilled team member. In most cases, though, you’ll need to invest in an external freelancer or SEO agency. This can range from $500 to +$30,000 per month depending on lots of additional factors (for example, do you only need a one-time SEO project or ongoing services?)
- Competition – From different industries to keyword difficulty and geographic location, these factors can also influence your overall CPL
- Service complexity – Will you need additional content to supplement your SEO project, like new pages and blog posts? How about backlinks? The size and type of website can make a big difference, too. For example, SEO for an eCommerce with hundreds of products will usually cost more than for a small service-based business with 20 web pages
Event marketing
You can attend relevant ones (like industry-specific trade shows) or run your own. Overall, events are a great opportunity to position yourself as a leader in your industry, attract your audience and stand out from your competitors.
However, they tend to be A LOT more expensive than other lead generation tactics. So, even when they’re ticketed, many businesses run events at a loss. If you have a strong lead generation and sales strategy, though, you can make plenty of money from them.
Average Cost Per Lead: $811
Main factors influencing this CPL:
- Online or in-person – The former tends to be a lot cheaper. The cost of in-person events, on the other hand, will depend on several additional factors
- Event scale – Bigger events tend to be more expensive but might actually bring you more leads
- Location – From cities to venues, this will all influence your overall cost and CPL
- Additional costs to run and manage the event – Will you require catering? How about staff and speakers? Will you be handing out promotional materials and gift bags? Have you considered your travel costs? And how will you be marketing and promoting your event?
- Attendee engagement strategies – To get more leads and convert them into actual customers, you’ll need a strategy to follow up with your attendees after your event. So, how will you contact them? Will you hire a copywriter to craft a new email sequence? Will you offer an exclusive 1:1 session to your attendees? Basically, what happens after your events will also affect their CPL
What makes your lead generation cheaper (and your CPL lower)?
This is the same for any channel and strategy. To get more leads, you must offer your target audience something they actually want. Otherwise, you’ll end up wasting a lot of money on tactics that:
- Bring you traffic but don’t convert it into leads
- Bring you low-quality and irrelevant leads that will never buy from you
That’s why it’s important to start with a strong lead magnet. The best option for lead generation? A quiz!
While traditional PDFs only convert at 3-10%, quizzes reach a whopping 30-50%. Why?
- Valuable – A quiz helps your audience understand their current situation and receive personalised advice (for example, think of a quiz like “What’s your ideal morning routine?” or “Your FREE Content Marketing Assessment”). So, they’ll be much more likely to sign up for it
- Strategic – You’ll get to ask lots of relevant questions and even pre-qualify your leads based on how likely they are to become customers
- Segmentation – Your quiz will divide your participants into groups based on their answers
- Nurturing – You can then set up different and more targeted email sequences for each segment
- More effective – Thanks to this tailored and personalised experience, your audience will be more likely to keep engaging with your brand. You’ll also get to recommend the perfect product or service for them
- Versatile – Your quiz lead magnet can complement ALL your other lead generation tactics, too! For example, you can use it as your main call to action in blog posts, social media profiles and content, at the end of your videos or podcast episodes, with paid ads, on your website, during events and more
So, with ONE strong quiz lead magnet, you’ll maximise ALL your lead generation efforts, get more relevant contacts and even turn more of them into customers.
Optimise your CPL, and boost your lead generation with a ScoreApp quiz
With ScoreApp, you can build a full quiz funnel for free.
So, start with a strategic quiz lead magnet and then get it in front of your audience through some of the tactics we’ve covered.
Ready to make your leads go up and your cost per lead down? Create your ScoreApp quiz today and for FREE.
