Cost Per Lead vs Cost Per Job: The Trades Marketing Math Every Owner Should Know

Short answer: Cost per lead is what you pay for a single enquiry. Cost per job is what you pay in marketing to actually win one paying job. Cost per job is the number that truly matters, because leads don't pay your bills, booked jobs do. A cheap cost per lead means nothing if those leads never convert, and a higher cost per lead can be a bargain if it produces jobs worth thousands. Track cost per job against your average job value, and you'll always know whether your marketing is making money.

Here's the simple math every trades business owner should understand.

The two numbers, defined

Cost per lead (CPL) is your total marketing spend divided by the number of leads it generated. If you spend A$2,000 and get 20 enquiries, your cost per lead is A$100.

Cost per job (CPJ), sometimes called cost per acquisition, is your total marketing spend divided by the number of jobs you actually won. If that same A$2,000 produced 20 leads and you closed 4 of them, your cost per job is A$500.

The gap between those two numbers is your conversion rate, and it's where most trades businesses win or lose money.

Why cost per job is the number that matters

It's tempting to chase the lowest cost per lead. But a lead is just a conversation, not revenue. Two examples make the point:

Business A pays A$50 per lead but only closes 1 in 20, so its cost per job is A$1,000. Business B pays A$120 per lead but closes 1 in 4, so its cost per job is A$480. Business B pays more than double per lead and still wins jobs for less than half the cost, because it converts better. Cost per lead alone would have told you the opposite of the truth.

This is why follow-up and sales skill matter as much as ad spend. Improving how many leads you convert lowers your cost per job without spending a cent more on marketing.

A worked example

Say you run a landscaping business. You spend A$3,000 in a month on ads and generate 30 enquiries. That's a cost per lead of A$100. You close 6 of those into jobs, so your cost per job is A$500. Your average job is worth A$8,000.

That means you spent A$500 to win an A$8,000 job. Even after materials and labour, that return is excellent. In fact, this tells you that you could afford to pay a lot more per job and still profit, which means you can confidently increase your ad budget to win more work.

How much can you afford to pay per job?

Work backwards from your numbers. Take your average job value, subtract your costs to deliver it, and you have your profit per job. You can afford to spend a sensible portion of that profit to acquire the job. The higher your average job value and margin, the more you can afford to pay per job, and the more aggressive you can be in outbidding competitors for clicks and leads.

A business with A$8,000 jobs can comfortably spend far more to win one than a business with A$800 jobs. That's why knowing these numbers changes how aggressively you can grow.

How to lower both numbers

You can improve your marketing maths in three places. Better targeting lowers your cost per lead by reaching more of the right people. A stronger website and offer lift your conversion rate, which lowers your cost per job. Faster follow-up wins more of the leads you already pay for, again lowering cost per job. Most trades businesses get the biggest gains from the last two, not from chasing cheaper clicks. (See why you might not be getting quote requests).

Frequently asked questions