On this page
Lead vendors quote cost per lead. Appointment setters quote cost per appointment. Ad platforms report cost per click and cost per conversion. Comparing those numbers directly is like comparing the price of lumber with the price of a finished deck. To compare fairly, convert every source to the same unit — ideally cost per sale.
The conversion chain
Each step between a lead and a sale has a conversion rate. Divide cost by each rate to move down the chain:
- Cost per contact = cost per lead ÷ contact rate
- Cost per appointment = cost per contact ÷ booking rate
- Cost per sit = cost per appointment ÷ show rate
- Cost per sale = cost per sit ÷ close rate
Use your own rates for each source. If you don't track them yet, start with the sales KPI dashboard.
A worked comparison
Illustrative numbers for three sources:
| Shared lead | Exclusive lead | Booked appointment | |
|---|---|---|---|
| Unit price | $50 per lead | $120 per lead | $250 per appointment |
| Contact rate | 50% | 70% | — |
| Booking rate (of contacts) | 30% | 45% | — |
| Show rate | 75% | 80% | 85% |
| Close rate (of sits) | 18% | 28% | 30% |
| Cost per appointment | about $333 | about $381 | $250 |
| Cost per sit | about $444 | about $476 | about $294 |
| Cost per sale | about $2,470 | about $1,700 | about $980 |
In this example, the cheapest unit price produces the most expensive sale. That's not always true — it depends on your rates — but it happens often enough that comparing unit prices alone is risky.
Don't forget labor
The table above leaves out your team's time. Leads require calling, voicemails, texts, and booking. If an office coordinator spends hours each week working leads, add that cost:
Labor cost per sale = hours spent working the source × hourly cost ÷ sales from that source
Appointments shift most of that labor to the vendor, which is part of what you're paying for. Our appointment setting vs. lead generation guide covers when that trade is worth it.
Where each metric is useful
| Metric | Use it for |
|---|---|
| Cost per lead | Comparing lead vendors with similar quality |
| Cost per appointment | Judging booking efficiency |
| Cost per sit | Comparing any sources fairly, including appointment programs |
| Cost per sale | Deciding where the next dollar goes |
| Revenue per lead or sit | Capturing differences in job size |
Adjust for job size
Two sources with the same cost per sale aren't equal if one produces $8,000 jobs and the other $18,000 jobs. Add revenue per sit or gross profit per sale to the comparison, especially across trades or project types. The lead ROI calculator guide shows how to lay it out in a spreadsheet.
Common comparison mistakes
- Comparing one source's cost per lead with another's cost per sale
- Using industry averages instead of your own conversion rates
- Judging before slow-closing sales have had time to close
- Ignoring the labor of working leads
- Ignoring replacements and credits that lower a vendor's effective price
For what appointment programs typically cost under different models, see how much appointment setting costs.
Frequently asked questions
What is the difference between cost per lead and cost per appointment?
Cost per lead is what you pay for contact information. Cost per appointment is what you pay for a booked meeting. To compare them, divide cost per lead by your contact and booking rates to get an equivalent cost per appointment.
What is cost per sit?
Cost per sit is the total cost of a source divided by the appointments that actually took place. It removes no-shows and cancellations from the comparison.
Which is better: low cost per lead or low cost per sale?
Low cost per sale. A cheap lead that rarely turns into a job can cost more per sale than a more expensive lead or appointment that closes well.
How do I calculate cost per sale?
Divide the total spent on a source, including your labor to work it, by the number of sales it produced over the same period. Wait for a full sales cycle before finalizing the number.
RunsForYou Team
Written by the team that runs outbound calling, homeowner qualification, and appointment booking for home service contractors at RunsForYou (Runs For You LLC).
Related services