Phil Risher says cost-per-lead is a vanity metric that hides bad results. A home-service company spent $22,000 monthly on Google Ads to lower CPL but got leads from people who didn't speak English, weren't in service area, or couldn't afford the work. Measure ROAS and profit instead.
Cost per lead is vanity. Profit is sanity. We had a home service business whose marketing company was driving down their cost per lead, and they were spending $22,000 a month on Google Ads just to drive down cost per lead and throw it all on black because the cost per lead's so low. What was happening though was that they were getting such cheap leads that those people did not convert. They didn't speak English, they weren't in their area, they weren't high-ticket buyers. We said, man, slow down, slow down. You need to go and get high-quality leads to take that budget and pull it all the way through to profit and get your return on ad spend, then you can know what to do from there. Cost per lead is a vanity metric that marketing companies use as smoke and mirrors when they don't know the actual return on ad spend. And when you go to talk to them, they say, just spend more on ads. Your cost per lead is this. That's great, but it's not the full picture.
