Why can a $50 lead be a bargain and a $120 lead a loss?
Owners argue about lead prices without the number. "$50 a lead is a rip-off." "Cheap leads are rubbish." Both can be true, and neither tells you what to bid. Lead value does. If an enquiry is worth $87 in margin, a $50 lead makes $37 and a $120 lead loses $33, and no amount of opinion changes it.
The number also shows where the money is. The cheapest way to make every lead worth more is to close more of them, and that costs nothing in ads. The enquiry you answer in five minutes is worth more than the one you answer tomorrow, because the customer rang two other plumbers in between.
What are a plumber's 30 enquiries worth? (example figures)
A plumber gets 30 enquiries a month from Google Ads, wins 10 jobs, and the average job is $650 with a 40 percent gross margin after the apprentice, the van and the parts.
| Sum | Result | |
|---|---|---|
| Close rate | 10 of 30 | 33 percent |
| Lead value, revenue | $650 × 0.33 | $217 |
| Lead value, margin | $217 × 0.40 | $87 |
| Ads at $50 a lead | 30 leads × ($87 less $50) | $1,110 a month ahead |
| Ads at $120 a lead | 30 leads × ($87 less $120) | $990 a month behind |
Now the close rate. If the plumber answers the phone on the first ring and quotes the same day, and wins 12 jobs from the same 30 enquiries, each lead is worth $104 in margin. The $120 lead is still a loss, but the $50 lead now makes $54, and the month makes $1,620 from the same ad spend.
Where do you read it?
In Google Ads, a lead is a conversion you set up: a form sent from the page, a call from the ad, or a click on the phone number. Each is its own conversion action, and the Conversions column adds them together, so split them by action before you divide the spend by them, or a lead that is really a misdial gets counted at $87. In Meta, leads come from the platform's own lead forms or from events the Pixel sends from your website. The count to trust is your own: the phone log and the enquiry inbox. The platforms count what they can see.
What does Cora do with your lead value?
In the onboarding call, Cora asks for your average sale. For a business that wins work through enquiries, the dashboard counts leads instead of sales, and once Google Ads and Meta are connected the cards show the last 7 days of cost per lead. Cora reads that cost against what a lead is worth to you, so the conversation is about the gap between the two numbers, and about the close rate, which is the lever you own.
Questions
What is the difference between a lead and a conversion?
A conversion is whatever you told the ad platform to count, which might be a form, a call, or a click on the phone number. A lead is a person you can contact. Some conversions are leads. Some are the owner testing the form.
Why do my leads cost more than another business's?
A different trade in a different suburb, with different competitors on the keyword. The comparison that matters is your lead cost against your lead value, not against anyone else's lead cost.
Should I count every enquiry as a lead?
Count them all, then count the ones that could buy. If half your enquiries are people outside your area, your close rate on the leads that could buy is twice what it looks, and the problem is the ad's location settings, which is a different fix.