Cost of Leads

Cost of Leads are a specific part of the Cost of Marketing and include all direct marketing cost to create leads. They answer how much it costs to bring a qualified lead into the pipeline via various lead channels (e.g. Paid Traffic, Organic Traffic, Events, …). Beginner Mode allows you to add the first lead channel. You can later on add additional lead channels.

Investing in the most effective lead generation channels is crucial to ensuring the future success of your business. Email marketing, content marketing, social media marketing, landing page and website optimization, and SEO make up effective online lead generation channels, while Event Marketing and Sponsorship, Print advertising, Direct mail and Outbound Calls are offline lead generation channels and result in opportunities for filling your lead pipeline.

Learn how to add Cost of Leads based on the results of the Forecast Model within the Revenue Stream

  • Forecast Models "New Customer" - all Forecast Models in Lean-Case except the Marketing Budget Model calculate the number of New Customers generated per month. In order to reach these customer numbers, the Cost of Leads Model calculates the Total Cost of Leads required.
  • Forecast Models "Marketing Budget" - the Forecast Models "Marketing Budget" does not directly calculate the number of new customers but defines the Marketing Budget available per Month and requires the Cost of Leads required to calculate the number of new customers. Using the the Marketing Budget Forecast requires the definition of the Cost of Leads.

What’s the name of your lead channel?

Enter the name of the lead channel (e.g. Google, Agency, Events, ..)



What is the average Cost per Lead created via this channel?

Enter how much you pay to create a lead (e.g. 2$ for a landing page view created via Google Adwords, 30$ for a lead scheduled by an agency for a demo call,  $100 for a qualified contact from a conference, ..). You can enter a flat number or vary the number over time to reflect increasing efficiencies, rising prices, … via the <UPW> icon.


What is the conversion rate of leads into ‘customers’ of this revenue stream in %?

Enter the conversion rate of how many leads convert ‘into customers’ (e.g. the share of landing page viewers who become signups subscribing with their email, the share of demo calls resulting into trials or the share of conference contacts turning into paying customers). You can enter a flat number or vary the number over time to reflect better performance, … via the <UPW> icon.


How many month before conversion do you typically spent your cost of leads? What is the cash-flow impact of cost of leads?

Enter how many months before your leads convert you have to spend your ‘cost-of-leads’ budget (e.g. 3 months before the conference, you have to pay the conference invoice). If spent and conversion happen at the same month, keep the number at 0.

Add Lead Channels

To add a new Lead Channel, click the <+ Add Cost of Leads> button. To define the Cost per Leads of this channel, enter the following parameters:

  • Name of Lead Channel (e.g. Google, Organic, Events, ..)
  • Share of Channel in % of New Customers / Marketing Budget (Ensure that share of channels add up to 100%)
  • Cost per Lead in channel - what is the cost of one lead
  • Lead Conversion in % - how many leads are converted into customers in context of the revenue stream
  • Maximum Capacity of Lead Channel, e.g. becasue Search Volume represents a maximum limit  (only enabled for Forecast "Marketing Budget") 
  • Cost Impact in prior months - number of months when Cost of Lead occur before customers are generated (often marketing cost occur 3-6 months before results can be measured)
  • No of Leads Required per Customer (calculated metric as a result of the conversion rate) 
  • Cost per Customer (calculated metric as a result of "No of Leads Required"  x "Cost per Lead"

Note: The Share of Leads across all Lead-Channels must add up to 100%

"New Customer"-Forecast and Cost of Leads

If a "New Customer" Forecast is used, the user cannot adapt the maximum number of leads which can be generated through this channel. The field Maximum Capacity of Lead Channel is disabled.

"Marketing Budget"-Forecast and Cost of Leads

If Lead Capacity Method "Marketing Budget" is used (i.e. Forecast Method "Marketing Budget" has been selected, the user can manually adapt the maximum number of leads which can be generated through this channel. This is useful, e.g. when the search volume of certain keywords is not very high or when the number of visitors on events represent a maximum limit of leads which can be generated. 

The maximum number of leads will thereby limit the number of customers which can be generated through this channel.

As this Model is conneced to the Forecast Model "Marketing Budget", please refer to Forecast Model - Marketing Budget for further details.