Cheap leads are expensive

Two campaigns run for a month for the same painting contractor. The first brings in leads at 30 each. The second brings them in at 75. Asked which to switch off, most people pick the second. Here is the rest of the story.

These figures are an illustration, not client results, but the pattern is one we see constantly. The campaign with the cheap leads cost two and a half times as much per job. It also cost the contractor around forty wasted phone calls.

Why cheap leads happen

An ad platform delivers what it is asked for. Asked for leads at the lowest cost, it finds the people most likely to fill in a form, and those are not always the people most likely to hire you. A form with no questions, an offer with no price signal, and an audience with no boundaries all push the cost per lead down and the quality with it.

What to do instead

• Record what happens to every lead. A spreadsheet with four columns is enough: date, campaign, did they answer, did they book.
• Judge campaigns on cost per booked job. Review it monthly, since jobs take time to close.
• Add a qualifying question or two. Expect fewer leads at a higher cost each, and check whether cost per job falls.
• Know your ceiling. Work out what a booked job is worth so you know what you can pay for one.

Our guides on lead quality and break-even costs cover both in detail.

The uncomfortable part is that the better campaign often looks worse in Ads Manager. If the only number you report is cost per lead, you will be rewarded for the wrong work.