YouTube video by Adam Sand explaining the components of cost per lead and how CPM, CTR, cost-per-click, and conversion rate combine to determine customer acquisition cost. The speaker warns that many business owners focus only on cost per lead and conversion rate without understanding upstream levers (CPM/CTR) they can adjust to lower customer cost.
To determine cost per lead. There's some things that dive deeper into it, and that's your cpm, right? Your cost per thousand impressions. Knowing this, it kind of ties into your click through rate, which can determine your cost per click. And then when you think of your conversion rate, these are the three things that make up cost per lead. And what I find is that business owners who don't have a marketing background don't know enough about the CTR and CPM and the impact that those will have on your cost of customer. They're just thinking about cost per lead and conversion rate. So they're saying, we pay $100 a lead and we close at 10%, we're paying $1,000 a customer. They know that, but they don't know the levers that they can pull.
