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. 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 lead could be worth $3,000 in a particular industry.
- Divide the AOV by 3. ($3,000/3 = $1,000)
- Figure out the 5% conversion rate (5/100 x $1,000 = $50)
And lo and behold, you’ve got your price 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.