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How to use
Simply fill out the left column of the Lead Cost calculator for the results to automatically calculate.
More on what you need to fill out below:
- Budget: This is your monthly ad spend.
- Average cost-per-click: How much you’re currently spending per. link click to your website.
- Conversion rate: Shows how often, on average, a link click leads to a Sale. It’s “Sales” divided by the link clicks on your ad.
- Average Sale Value: The average sale value of an order on your store.
Frequent questions
As a rule of thumb, I recommend spending at least $15/day ($450/month) across Facebook and Instagram. This gives you enough spend to show ads to a good amount of people while also allowing you to gather enough data to make informed changes.
If you would like to create a larger impact I recommend spending as much budget as your marketing fund allows you to broaden your reach.
Average cost-per-click is how much on average you pay per click across your chosen ad platform.
For Google Ads, this will be how much you pay every time a user clicks on your ad.
Facebook or Instagram, you’ll want to look for “cost/link click as this is a vital metric to measure when a user clicks your ad to go to your website.
Return on ad spend (a.k.a ROAS) is vital for calculating the profitability to any business. This metric tells you how much money you’re making for every $1 you’re spend.
For example: If you spend $30 on your ad campaign and made 3 sales at $10ea. with a sale value of $60. This means you generated $180 in sales from only $30 ad spend.
This would mean you had a ROAS of 6x (for every $1 you spend, you made $6 back)
Please note: ROAS does not include how much you actually paid for the product. This would need to be subtracted from the total.
This metric is completely dependent on the cost price of your product or service, your operating costs and other values generated from running a business.
As a general rule of thumb, most experts say a return of ad spend (ROAS) of 4x is a good baseline to start from.