Contractor Cost Per Lead vs Cost Per Job Won: How to Tell If Your Leads Are Worth It

You paid for a lead. Maybe it was 30 bucks, maybe 80. It called, you quoted, and then nothing. Do that a few times in a month and you start wondering if the whole thing is just a way to hand money to a website.

The trouble is that the price on the lead is not what the job cost you. The real number is what you spent to actually win a job, and almost nobody works it out. Here is how, with math simple enough to do in a truck.

Quick answer

Cost per lead is what you pay for each inquiry. Cost per job won is everything you spent on leads in a stretch of time, divided by the number of jobs you actually closed from them. The second number is the only one that matters. A 40 dollar lead can be a bargain and a 10 dollar lead can be a waste, and you cannot tell which until you divide by jobs won.

The one formula

Pick a stretch, say the last 90 days. Add up what you spent on that lead source. Count the jobs you won from it. Divide.

Spend divided by jobs won = cost per job won.

Here is an example with made up numbers. You spent 900 on a lead service in three months and got 30 leads. That is 30 a lead, which sounds fine. But you only won 3 jobs from those leads. So 900 divided by 3 is 300 per job won.

Now the real question. Is 300 okay? That depends on what the job pays you, and that is the next part.

Compare it to profit, not to revenue

A job that brings in 4,000 is not a job that earns you 4,000. After materials, labour, fuel and your own time, maybe you keep 1,200 of it. That is your profit on the job.

So if it cost you 300 to win a 1,200 profit job, you kept 900. That is a good source. If the average job from that source only nets 250, you are paying 300 to make 250, and you are losing money on every win.

Use profit, not the invoice total. This is where a lot of contractors fool themselves. Revenue looks big. Profit is what pays your bills. If you are not sure what a job really nets you, how to price a job goes through building the number so you know your margin before the quote goes out.

The two numbers that move your cost per job won

Cost per job won is spend divided by wins. So there are only two ways to push it down. Spend less per lead, or win more of the leads you already paid for.

Most guys try the first one. They shop for a cheaper lead service, or they cut the budget. It rarely helps, because cheaper leads are often worse leads, and your close rate drops right along with the price.

The second one is where the money is hiding. If you win 1 in 10 leads and you move that to 2 in 10, your cost per job won is cut in half. You did not spend a cent more on leads. You just stopped losing the ones that were already in your hands.

If you want to know where you stand, what is a good close rate for contractor quotes gives you ranges to check yourself against.

Where wins get lost after you pay for the lead

A paid lead is usually shared. The customer filled out a form and three or four contractors got the same message. The first one to call often gets the job, and the rest get a voicemail.

That means two things leak your money.

The first is speed. If you call back in two hours and someone else called in ten minutes, you were never in the race. How to follow up on Thumbtack and Angi leads covers what to say and how fast to say it.

The second is the quote that goes quiet. You sent the number, the customer said they would think about it, and then you never heard back. You already paid for that lead. Dropping it after one try is the same as throwing the lead fee in the trash. Contractor lead follow-up is worth a read for how to keep going without being a pest.

How to track it without a spreadsheet obsession

You do not need software. Keep a simple note, or a page in a notebook, with four columns.

Where the lead came from. What you paid, if anything. Did you quote it. Did you win it.

At the end of the month, add up each source. A source can be a lead service, a Google ad, a Facebook group, a yard sign, a referral. For each one write down spend, leads, jobs won, and profit from those jobs.

Free sources count too, even if the spend is zero. A referral that costs nothing and closes half the time is worth more than any paid lead, and you will only see that if you write it down.

What to do with the answer

Once you have a few months of numbers, the decisions get easier.

If one source has a low cost per job won and decent profit, put more into it. If one has a high cost and thin profit, stop, or at least test it with a smaller budget before you keep feeding it.

If a source has lots of leads and few wins, do not cancel it yet. Look at your own follow up first. Maybe the leads are fine and the loss is happening after the quote goes out. Fix that, then judge the source again.

And if the numbers are bad across the board, the problem may be price or the way you present it, not the leads. Win more jobs without lowering your price has some ideas that do not start with a discount.

Do not forget the cheapest lead you have

The cheapest customer you will ever get is one you already served. They know you, they trust you, and they cost you nothing to reach. How to get repeat work from past customers and how to ask customers for referrals both feed that side. A shop that gets a third of its work from repeat and referrals can afford to be picky about paid leads.

There is also the pile of old quotes sitting in your phone from the last year. Some of those people still need the work done. How to re-engage old quotes shows how to wake them up. Those leads are already paid for.

A short version

Do not judge a lead by what it costs. Judge it by what each won job costs you, compared to what that job nets you in profit. Divide your spend by your wins, check it against profit, and keep a plain note by source. Then work on the part you control most, which is winning more of the leads you already have.

The part that slips

The math takes ten minutes. What slips is the follow up. You are on a roof or under a sink, the lead comes in, and by the time you get back to it the customer has hired somebody else. And the quotes you sent last week go quiet because nobody had a free hand to chase them.

That is what QuoteChaser is built for. It follows up on every quote that has gone quiet, in your own voice, and pings your phone when a customer writes back, so the leads you paid for do not die in your inbox.

Join the QuoteChaser waitlist and stop paying for leads you never finish.