Revenue from a customer is not the amount available to pay for acquiring that customer. Delivering the sale has costs, and not every lead becomes a customer. A lead-value worksheet brings those facts together. It is useful for examining your assumptions, provided you keep observed results separate from scenarios and do not treat the output as a guaranteed acquisition budget.
Choose one period and a consistent sales basis
Define which leads and customers belong in the calculation. Use one campaign or a coherent group over a stated period, and identify how much time those leads have had to become customers. Do not divide recent leads by sales from a different group. If several enquiries belong to one person, apply a consistent rule for counting them.
Choose whether sale value means the initial completed purchase or another clearly defined amount. Do not add speculative repeat purchases just to increase the apparent value. Use the same currency and treatment of taxes, refunds and discounts throughout. Record missing costs or unresolved outcomes so the worksheet’s limits remain visible.
Calculate contribution per customer
Subtract variable delivery cost per customer from revenue per customer. Include the costs that change with that sale, such as materials or directly attributable fulfillment costs, using the cost basis appropriate to your records. Keep campaign setup and ad spend separate so they are not counted twice.
For this worksheet, contribution per customer is revenue per customer minus variable delivery cost per customer. It is not net profit. General overhead, taxes, refunds and any costs not entered still affect the business. If the result is zero or negative, adding more sales at those inputs cannot cover positive campaign costs.
Illustrative contribution calculation
Assume a fictional service brings in $180 per customer and costs $110 in variable delivery costs. Each customer contributes $70 before campaign costs and other excluded expenses. These figures are invented to demonstrate the arithmetic, not suggested prices or industry benchmarks.
Apply an observed or assumed close rate
With observed data, divide customers won by the leads in the defined group. In a scenario, enter a close rate explicitly as an assumption. Do not present an assumed rate as measured performance. Small groups and incomplete sales cycles can produce unstable results, so keep the counts and time window beside the percentage.
Multiply contribution per customer by the close rate expressed as a decimal. With $70 contribution and a 20% close rate, the modeled contribution per lead is $14. This is an arithmetic average under those inputs, not a promise about the next lead. In scenario mode, fractional customer counts describe the model and are not actual people.
Compare contribution with all entered campaign costs
Add ad spend and other campaign costs, then divide that total by leads to calculate all-in campaign cost per lead. Divide by customers won for campaign acquisition cost per customer. Label any ad-spend-only measure separately. The Local Business Lead Value Calculator includes entered other campaign costs in its cost-per-lead output.
For 40 leads and eight customers at $70 contribution each, contribution before campaign costs is $560. If ad spend is $300 and other campaign costs are $100, total campaign cost is $400: $10 per lead and $50 per customer. Contribution after those campaign costs is $160, before expenses excluded from the model. The positive amount does not establish overall business profit.
Use the result to question the assumptions
Change the close rate or delivery cost to see how much the conclusion depends on uncertain inputs. A modeled contribution per lead is not automatically a sensible maximum bid or spending target; the business still needs room for overhead, uncertainty and its required return. Use actual records and the owner’s budget decision when setting a test threshold.
When there are no leads, cost per lead is undefined. When there are no customers, acquisition cost per customer is undefined. Display those cases as unavailable rather than zero. Revisit the worksheet as outcomes mature, preserving earlier snapshots so an improved result does not erase what was known when the decision was made.
- One defined group and time period.
- Consistent revenue and cost basis.
- Observed counts separate from assumed rates.
- Ad spend and other campaign costs both visible.
- Contribution is not labeled net profit or a forecast.
Your next step
Enter one complete campaign group into the Lead Value Calculator. Review both the observed result and a clearly labeled alternative close-rate scenario before deciding what further evidence you need.
Sources
U.S. Small Business Administration: Break-even point · Checked 2026-10-28
