The most you can afford to pay
- Max cost per lead
- —
- Max cost per customer
- —
Lead Value Calculator: What Is Every Lead Really Worth?
Find out what each lead and each customer is worth to you, and the most you can afford to pay to win one. The formulas are shown, and your result is free.
- Free
- No email for your result
- +50 Butter Points
Your customers
Each lead is worth
—
in lifetime gross profit at your — margin, out of about — in lifetime revenue per lead.
in lifetime revenue (margin is set to 100%). The first sale alone brings in about — per lead.
- Lifetime value per customer
- —
- Purchases over a lifetime
- —
- First sale—
- Repeat purchases—
- Referrals—
Each golden pat is a slice of a customer's lifetime value: where the money comes from over the years they stay.
Your full breakdown
Each lead is worth—
Now You Know What a Lead Is Worth. What Can You Spend?
Your free Butter Report adds your maximum cost per lead and cost per customer, plus a checklist for comparing every channel you pay for against those limits.
- Maximum cost per lead and per customer
- Your channels vs. your limits checklist
- Your inputs and formulas, saved
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Your full breakdown
A year of leads, in dollars
—in lifetime gross profit from 12 months of leads
At your max cost per lead, you could invest up to — a month to win them.
Your channel checklist
That benchmark is under your max cost per lead, so paid search can pay for itself if your close rate holds.
That benchmark is above your max cost per lead. Tighten targeting and raise your close rate before you scale paid search.
- Raise your close rate first. Five more points adds about — to every lead you already get.
- Ask every channel for cost per lead and cost per customer, not clicks or impressions.
- Fund channels that come in under your max cost per lead first, then test the rest with small budgets.
- Follow up fast. Companies that contacted a lead within an hour were nearly 7 times as likely to qualify it as companies that waited even one hour longer (HBR, 2011).
- Ask happy customers for referrals and track them. Referrals raise lifetime value without raising cost per lead.
Fill your pipeline at a price that pays
We build lead generation around your numbers (cost per lead, close rate and lifetime value), then follow up on every lead automatically.
How we calculated this
The formula, in plain words
Customer lifetime value = average sale × purchases per year × years × gross margin × (1 + referrals). Value per lead = close rate × lifetime value. Maximum cost per customer = lifetime value × your ratio. Maximum cost per lead = value per lead × your ratio.
Example: a service business
- Average sale
- $450
- Purchases per year
- 2
- Years as a customer
- 5
- Gross margin
- 50%
- Close rate
- 25%
- Spending ratio
- one-third
- Lifetime value = $450 × 2 × 5 × 50% = $2,250 in gross profit
- Value per lead = 25% × $2,250 = $562.50
- First-sale value per lead = 25% × $450 = $112.50
- Most you can spend per customer = $2,250 ÷ 3 = $750
- Most you can spend per lead = $562.50 ÷ 3 = $187.50
Each lead is worth about $562.50 in lifetime gross profit, so you could afford up to about $187.50 per lead.
Example inputs, not benchmarks.
Estimates for planning only; based on cited industry benchmarks. This is an estimate based on the numbers you entered. It's not a guarantee of results.
Popular with Home Builders Nonprofits Law Firms Private Schools
Quick answer
How do you calculate the value of a lead?
Value per lead = your close rate × customer lifetime value. Customer lifetime value = average sale × purchases per year × years as a customer × gross margin. A common rule of thumb is to spend up to about a third of lifetime value to win a customer; multiply value per lead by the same ratio for your maximum cost per lead.
Four Quick Steps to Your Number
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Enter your average sale, how often customers buy and how long they stay.
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Add your gross margin and your close rate.
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Optionally add referrals per customer, or pick an industry preset.
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See your value per lead and lifetime value instantly.
How This Tool Does the Math
How we calculate lead value
A lead is worth what it turns into, on average. This calculator starts with your customer's lifetime value and works back to the most you can afford to pay for a lead.
- Customer lifetime value (CLV) = average sale × purchases per year × years as a customer × gross margin × (1 + referrals per customer).
- Value per lead = close rate × CLV.
- First-sale value per lead = close rate × average sale.
- Most you can spend to win a customer = CLV × your chosen ratio (one-third by default).
- Most you can spend per lead = value per lead × the same ratio.
Why gross margin, not revenue
Revenue isn't what you keep. Using gross margin means the result reflects what a customer actually contributes after the direct cost of delivering the work. Not sure of your margin? Enter 100% and remember the results are revenue-based.
The one-third rule of thumb
Keeping the cost of winning a customer to about a third of their lifetime value is a common rule of thumb, not a law. Your cash flow decides what's comfortable. A business that gets paid up front can spend more to win a customer than one that waits a year to earn back its costs. Change the ratio to match your situation.
Industry presets
Two presets fill in sourced numbers you can edit. Home builders: the U.S. median new-home sale price was $393,700 in August 2026 (U.S. Census Bureau), and builders' average profit was 11.0% of the sales price in NAHB's 2024 cost study, which works out to about $43,307 of profit per home sold. The preset enters that 11.0% in the margin field, so the result is a profit-based estimate. Nonprofits: one-time-only online donors gave $183 a year on average in M+R's 2026 benchmarks. Every other input is yours, and example values are labeled as examples.
How to use your result
Compare your maximum cost per lead with what each channel actually costs you. If a channel's cost per lead is under your maximum, it can pay for itself. If it's over, improve your conversion rate or your follow-up before spending more, because faster follow-up raises your close rate and with it the value of every lead. The Ad Budget Calculator turns these numbers into a monthly budget.
Questions About This Tool
How the numbers work and what to do with them.
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Ask a real human. We answer in plain English and never send you down a jargon rabbit hole.
What's the difference between lead value and lifetime value?
Lifetime value is what a customer is worth over the whole relationship. Lead value is what a lead is worth on average, after accounting for the leads that never buy. Lead value = close rate × lifetime value.
Why use gross margin instead of revenue?
Because revenue isn't what you keep. Gross margin removes the direct cost of delivering the work, so the result reflects what a customer really contributes. Enter 100% if you'd rather see revenue-based numbers.
How much should I spend to get a customer?
A common rule of thumb is up to about a third of lifetime value. It's a rule of thumb, not a law: your cash flow decides what's comfortable, and you can change the ratio in the calculator.
How do I estimate how many years a customer stays?
Look at past customers: how many still buy after one, two or three years? If you're new, use a cautious guess like one or two years and update it as you learn.
Should I count referrals?
Only if you know them. Referrals make customers more valuable, but the field defaults to zero so the estimate stays conservative.
How does this help with my ad budget?
Your maximum cost per lead tells you whether a channel can pay for itself. The Ad Budget Calculator turns your goal into a monthly budget you can compare against it.
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Turn Your Number Into a Plan
Your result is an estimate from your own inputs. The fastest way to act on it is a free website audit, or a free 15-minute call where we look at your numbers together.
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Prefer to talk first? Book a free 15-minute call. Not ready for either? Try another free tool.
P.S. Every tool shows its formula and sources, so you can check our math before you trust it.