Track four numbers for every source: what you spent, how many leads it produced, how many became won deals, and the revenue from them. Compare sources on cost per won deal and ROI, not cost per lead. Cheap leads that never close are the most expensive kind.
Why is cost per lead misleading?
Cost per lead is easy to calculate, so it is the number most businesses watch. It is also the number most likely to mislead you. A source that delivers cheap leads that never buy is the most expensive source you have: you pay for the leads, and then you pay again in sales time spent chasing them.
Which four numbers should you track for each source?
- Spend: what the source cost this month, such as a portal package or ad spend.
- Leads: how many new enquiries it produced.
- Won deals: how many of those leads became customers.
- Revenue: the value of those won deals.
How do you calculate lead-source ROI?
- Cost per lead = Spend ÷ Leads
- Lead-to-win rate = Won deals ÷ Leads
- Cost per won deal = Spend ÷ Won deals
- ROI = (Revenue - Spend) ÷ Spend
What does a worked example look like?
Here is an illustrative month for a small industrial supplier. The figures are made up purely to show the method.
| Source | Spend | Leads | Won | Revenue | Cost per lead | Cost per won deal | ROI |
|---|---|---|---|---|---|---|---|
| IndiaMART | ₹25,000 | 120 | 6 | ₹3,00,000 | ₹208 | ₹4,167 | 1,100% |
| JustDial | ₹15,000 | 90 | 3 | ₹1,05,000 | ₹167 | ₹5,000 | 600% |
| Meta Ads | ₹20,000 | 200 | 4 | ₹1,60,000 | ₹100 | ₹5,000 | 700% |
Meta Ads has by far the cheapest leads, but in this example IndiaMART wins on the numbers that matter: the lowest cost per won deal and the highest return. Judged on cost per lead alone, this business would have moved its budget in exactly the wrong direction.
How do you keep the data honest?
- Tag the source automatically at capture. When reps type the source by hand, half the leads end up as "other".
- Decide how to credit repeat enquiries. If a buyer first came from JustDial and later enquired on IndiaMART, credit one source consistently (most teams use the first) and stick to the rule.
- Allow for time lag. B2B deals can close weeks after the enquiry. Compare sources by the month the lead arrived, not the month the deal closed.
- Record the deal value when you win. Without it, revenue per source is guesswork.
What should you do with the results?
- Shift budget towards the lowest cost per won deal, a little at a time.
- Compare the lead-to-win rate per source and per rep. Sometimes the source is fine and the follow-up is the problem.
- Check response time by source. A source that "doesn't convert" is often a source nobody calls quickly. See speed to lead.
- Review monthly, and give a new source two or three months before judging it.
Zublox tracks this for you: every lead is tagged with its source at capture, and the lead-source ROI report shows leads, deals won and revenue per source side by side.
Frequently asked questions
What is a good ROI for a lead source?
It depends on how profitable your products are, so compare sources against each other rather than against a fixed benchmark. The best source is the one with the lowest cost per won deal at a volume your team can handle.
Should I stop using a source with expensive leads?
Not on cost per lead alone. Expensive leads that convert well can be your most profitable source. Look at cost per won deal and ROI first.
How long should I test a new lead source?
Give it at least two to three months, and judge it by the leads that arrived in that period, because deals often close weeks after the enquiry.