The ladder, one rung at a time
- Cost per lead — spend divided by deduplicated contacts. Measures reach, nothing else.
- Cost per qualified lead — spend divided by contacts that were reachable, in area and wanted work you do.
- Cost per appointment — spend divided by appointments that were actually held, not merely booked.
- Cost per customer — spend divided by contacts that became customers, including those who bought something small.
- Cost per sold job — spend divided by jobs sold, the figure to compare against average job value.
Reading the jumps
The ladder is a diagnostic because each gap points at a specific failure. A large jump from lead to qualified lead means the targeting or the offer is attracting the wrong people. A large jump from qualified lead to appointment means speed-to-lead or follow-up is failing, not the advertising.
A large jump from appointment to sold job means the sales conversation or the pricing is the constraint. Only the first gap is genuinely an advertising problem — which is why pausing a campaign on a bad cost per sold job alone often removes a good campaign attached to a bad follow-up process.
Why the cheapest leads are usually the most expensive
It is easy to buy volume: widen the radius, loosen the targeting, offer something free. Cost per lead falls immediately and looks like a win. What follows is invisible on that report — more calls that go nowhere, more appointments set outside the profitable service area, more estimate hours spent on work that was never going to sell.
Those costs are real and land on people, not on the ad account. A campaign that halves cost per lead and doubles cost per sold job has made the business worse while improving the metric someone is judged on.
Making the numbers comparable
- State the attribution rule on the report; a first-touch figure and a last-touch figure are different numbers.
- Use a period long enough to cover the sales cycle, or the newest campaigns will always look worst.
- Deduplicate before dividing, every time.
- Include only spend attributable to the campaign, and say whether agency or management fees are in it.