Why is my cost per lead so high?

You probably can't pin a high cost per lead on one cause, and it might not be a problem at all.

This is one of the questions I get asked most. People want a setting to change. There isn't one.

From my research online point you'd be be pointed to industry cost per lead benchmarks and a list of generic tips. Neither looks at your offer, your ads, your lead quality or what a booked appointment costs you. That last one tells you whether you have a problem at all.

First, check whether it's actually a problem

Most people asking this are looking at the wrong number. Cost per lead is what a form fill cost you. What matters is what a booked appointment costs you. That's the number I judge every ad on.

Here's a real example. I co-own a solar business. We pay up between $65 and $150 per lead, some would say that's crazy, it's not. Because our cost per booked appointment sits bang on $212.

An appointment isn't booked unless is verified and deemed 'qualified' and as such our cost per qualified lead is also $212. I don't have to tell you our price point is high, so yes the unit economics make this a profitable customer acquisition engine.

Start here. Work out what you can afford to pay for a booked appointment. That comes from what a customer is worth to you, your margin and how many of your appointments you close. If your cost per booked appointment sits under that, your cost per lead isn't too high. It's just higher than you expected. I explain why your best ads often don't have the lowest cost per lead in this video.

Why not judge each ad on what a customer costs? Sales take too long and there are too few of them per ad. On Qvolt, my solar business, the sales cycle is about six weeks. You'd wait six weeks to judge each ad, on maybe one sale each. That isn't statistically significant. Selling is the sales team's job. The ad's job is to put booked appointments in front of them.

A cheap cost per lead can be the real problem

People treat a low cost per lead as the goal. From what I've seen, cheap leads often come with worse show rates. You fill the calendar with people who don't turn up.

Lead quality is decided before the click. A good ad says exactly who it's for and gives that person a reason to keep watching. That puts the wrong people off, which is the point. Fewer of them fill in the form, so each lead can cost more.

The form works the same way. Qualifying questions with conditional logic stop the people you can't help from submitting. Fewer leads get through, and the ones who do are qualified by definition. If that pushes your cost per lead up, the form is doing its job.

If cost per lead drops and cost per booked appointment rises, your ads got worse, not better. The reverse is also true.

Why you can't pin it on one cause

People want one answer. The audience is too small. Meta changed something. It's the season, the auction, the offer, the creative. There are too many variables moving at once to blame one with any confidence.

A few of the usual suspects are worth clearing up, because they send people in the wrong direction:

• Your audience. Narrowing it isn't the fix. Go broad and let the ad do the targeting, so long as it's scripted thoughtfully and specific about who it's for.

• Your ads wearing out. Creative fatigue is mostly a label people use when they haven't launched enough ads. It isn't a diagnosis.

• Your budget. Fiddling with it daily is a cause, not a cure. Constant small edits reset learning.

What actually brings it down

The fix is the same whatever the cause. Keep launching, testing and improving new ads. I go through the high cost per lead question in this video.

• Give every new ad its own adset at around $50 a day. Your budget decides how many ads you can test at once, not whether ads work.

• Judge each ad over four days, never daily. One bad day tells you nothing. Leave it alone and look at the four-day window.

• Test meaningfully different ads. Different ad types and different bait, not a new headline on the same ad.

• Move budgets slowly on winners. Change budget up or down by no more than 20% a day, in the adset where it sits. Duplicate winners; never edit them.

• Judge every ad on cost per booked appointment. Cost per lead is the early warning. At four days it tells you whether an ad clears your kill line. If it does, let it run to around 20 leads, then judge it on how many became qualified, booked appointments.

Do this consistently and the question mostly disappears. You stop worrying about why one ad got expensive, because you've always got the next one coming through testing.

FAQ

Why is my cost per lead so high on Facebook?

There are too many moving parts to blame one with confidence. Check what a booked appointment costs you first. If that's under what you can afford to pay, cost per lead isn't your problem. If it's not, launch and test new ads instead of tweaking the ones you have.

Is a high cost per lead bad?

Not on its own. An ad with more expensive leads can cost you far less per booked appointment if more of those leads book. Judge your ads on what a booked appointment costs you.

Will narrowing my audience lower my cost per lead?

That's not where I'd look. Go broad and let the ad do the targeting by being specific about who it's for.

Does my lead form affect my cost per lead?

Yes. Qualifying questions stop the wrong people from submitting, so fewer leads get through and each one can cost more. That's the form doing its job.

Does slow follow-up make my leads more expensive?

It doesn't change what Meta charges you for a lead. It changes how many of your leads book, so it changes what a booked appointment costs you. That's the number that matters. Speed to lead wins, and calling after hours is absolutely fine.

Should I compare my cost per lead to industry benchmarks?

Benchmarks tell you what other people paid for a form fill. They don't know your prices, your margins or how well you close. Work out your own ceiling for a booked appointment from what a customer is worth to you.