What should a lead cost a trades business? The questions, worked through

Is $80 a lead too much?

Short answer: you can't tell from the price alone. You need your gross margin per job and your booking rate.

Here's the calculation. Take three numbers:

1. Gross margin per booked job. What's left of the average invoice after materials and direct labour. Not revenue.
2. Marketing share. The part of that margin you're willing to spend to win the job. Many owners settle somewhere between a fifth and a third.
3. Booking rate. Out of every ten leads, how many become paid jobs.

Then: maximum cost per lead = margin × marketing share × booking rate.

Say your average job leaves $1,000 in margin, you'll spend 25% to win it, and you book four in ten leads. That's $1,000 × 0.25 × 0.4 = $100 per lead. At $80, you're fine. If you only book two in ten, the ceiling drops to $50, and $80 is too much.

Why does the booking rate matter so much?

Short answer: because it multiplies everything. Doubling your booking rate does the same for your affordable lead price as doubling your margin.

Most owners focus on the lead price because it's on the invoice. But the biggest gains often sit after the lead arrives: answering the phone, calling back fast, quoting clearly and following up. Improving the booking rate from 25% to 40% lifts the affordable lead price by 60% without changing a single ad.

If you don't know your booking rate, that's the first thing to fix. The tracking guide explains how to measure it.

How does the answer change by type of job?

Short answer: urgent, low-value work needs cheap leads that book fast; big projects can carry expensive leads that book slowly.

Here's how the same formula plays out across three common kinds of trades work. The figures are illustrations, not benchmarks; plug in your own.

Notice how the large project, despite a low booking rate, still supports the highest lead price. And notice the service call: at $45, many paid channels in competitive cities will struggle. That's one reason emergency trades often depend on a strong Google Business Profile, which has no per-click charge. See local search.

Should I think in cost per lead or cost per booked job?

Short answer: cost per booked job. Cost per lead is a step on the way.

Two channels can have the same lead price and very different value. Imagine Channel A costs $60 a lead and books 40%, while Channel B costs $60 a lead and books 15%. Channel A costs $150 per booked job; Channel B costs $400. On a lead-price report they look identical. On a booked-job report, B is plainly the weaker channel.

This is why I push every client to record, for each enquiry, where it came from and whether it booked. Once you have that, you can compare ads, directories, lead-selling services and organic search fairly.

How much should I spend in total each month?

Short answer: enough to fill the capacity you have, at a cost per booked job you can afford, and no more.

Work backwards:

1. How many extra jobs can you take each month? Be honest about crew and schedule.
2. What's your affordable cost per booked job? Margin × marketing share.
3. Multiply them. That's your ceiling for marketing that month.

If you can take 20 more service calls a month and can afford $90 per booked job ($300 × 30%), your monthly ceiling is $1,800. If a plan costs more than that, it either needs to produce higher-margin work or it isn't the right plan yet. The pricing page shows the same reasoning applied to our plans.

What about the long-term value of a customer?

Short answer: include it if you have the data, and be conservative.

A customer who books a $300 service call and later replaces a water heater, or calls you every year for maintenance, is worth more than the first invoice. If your records show that, say, a third of service customers return within two years, you can justify a slightly higher acquisition cost. But don't use optimistic lifetime values to justify losing money on every first job. Base the calculation on what you can prove.

What if my numbers don't add up?

Short answer: fix the step that's broken, in this order: booking rate, then landing pages, then targeting, then lead price.

1. Booking rate. Are calls answered? How quickly are messages returned? A text-back tool like CallText.chat can catch calls you miss on a job.
2. Landing pages. Do ad visitors land on a page about the exact service they searched for, with a tap-to-call button? See website conversion.
3. Targeting. Are you paying for searches, places or hours that never book? See paid ads.
4. Lead price. Only once the other three are sound is it worth negotiating harder or trying a new channel.

What can the HVAC results tell me about lead costs?

Short answer: that when spend is judged by return, the numbers can be strong, but your trade will have its own figures.

As results from our HVAC work, HVACDeal.ca produced 500+ leads at a 12:1 ROI and CombiBoiler.ca reached 300% ROI with 300+ monthly leads. These show what disciplined measurement can support, not what you should expect. The full set is on the results page.

Where do I go from here?

Short answer: calculate your own ceiling, then check every channel against it.

Write down your margin, marketing share and booking rate for your main job types. Work out the maximum cost per lead and per booked job for each. Then compare every channel you pay for. If you'd like a second pair of eyes on the numbers, the first 30-minute consultation is free for eligible trades businesses; see contact. For the rest of the library, return to the guides.