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Attract the Right Job or Clientele:
How to Improve Your Bottom Line for Sustainability
In the ever-evolving marketing world, one of the most persistent questions for business owners and career professionals is: Should we focus more on cost per lead (CPL) or cost per sale (CPS)? While both metrics provide valuable insights into the effectiveness of a marketing strategy, choosing the right one to prioritize can significantly impact your bottom line and how you interpret success.
Let’s break down each metric’s advantages and limitations and why the better question might be how to align each metric with your broader business goals. Accordingly, our guest blog offers insights on how to improve your bottom line for sustainability.
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How to Improve Your Bottom Line
Image by Geralt, Pixabay
Understanding Cost Per Lead (CPL)
CPL measures how much your business costs to generate a single lead — someone who has shown interest in your product or service, often by signing up for a newsletter, requesting a quote, or downloading gated content.
Advantages of CPL:
- It’s a helpful metric for evaluating the efficiency of top-of-funnel marketing efforts.
- CPL gives you early insight into campaign performance, especially in brand awareness or demand generation efforts.
- It allows quick comparisons between channels (email, paid search, social).
Limitations of CPL:
- Not all leads are created equal. You could have a low CPL but attract unqualified or uninterested contacts.
- Focusing solely on CPL can lead to inflated lead numbers without a meaningful revenue impact.
- CPL doesn’t measure whether a lead turns into a paying customer.
This is where many marketers fall into a trap: celebrating a low CPL while overlooking poor conversion rates and high churn on the backend.
Understanding Cost Per Sale (CPS)
CPS, on the other hand, reflects the actual cost to close a sale. It factors the lead generation expense and what it took to nurture and convert that lead into a customer.
Advantages of CPS:
- It measures marketing effectiveness in real business terms — revenue.
- CPS clarifies return on investment (ROI), making it especially valuable for sales-driven organizations.
- It focuses teams on outcomes, not just activities.
Limitations of CPS:
- It takes longer to gather meaningful CPS data, especially in industries with long sales cycles.
- It can be harder to track accurately if attribution systems are not well integrated.
- CPS doesn’t provide early performance indicators for course correction, which could be delayed.
Aligning Metrics with Objectives
If your primary goal is brand visibility or entering a new market, CPL can be a great metric to track early engagement. However, if your goal is to drive profit and long-term growth, CPS clarifies how well your efforts convert into actual revenue.
Many businesses discover that emphasizing CPL can prioritize quantity over quality, often resulting in leads that require more time and resources to nurture before they convert. Conversely, prioritizing CPS helps ensure you spend money on campaigns that bring in real, paying customers, even if the upfront lead cost is higher.
Why Qualified Leads Matter More Than Just Lead Volume
Imagine running a campaign that cuts your CPL in half. Sounds great, right? But if those leads are unqualified or unresponsive, your cost per sale could skyrocket. That’s why savvy marketers are shifting their attention to quality over quantity, ensuring that every lead in your funnel is more likely to convert.
This is particularly important when investing in paid media or purchasing consumer data lists. If those contacts aren’t a viable match for your offer or buyer profile, you could be wasting valuable time and money trying to convert them.
A Balanced Approach
The best marketers don’t choose between CPL and CPS; they measure both and understand how they relate. For example:
- CPL helps you assess how efficiently you’re generating interest.
- CPS tells you how cost-effective your entire sales process is.
By tracking both, you can spot disconnects, such as high lead volume but low conversions, and make data-driven decisions to refine your targeting, messaging, or sales funnel.
Turning Metrics into Momentum
In a world flooded with analytics and KPIs, it’s tempting to optimize for the lowest possible CPL. But unless those leads become customers, the metric is a vanity number. Shifting your focus to CPS — or at least using it as a guiding metric — can help ensure your marketing spend drives results, not just interest.
Conclusion: How to Improve Your Bottom Line for Sustainability
Ultimately, the most effective strategy bridges both worlds: generate leads that are likely to buy and measure your success by who clicks and who converts.
Author Bio: Richard Bufkin is President of TargetLeads, a division of Senior Direct Inc., a direct mail marketing company. With over 20 years of experience, he focuses on lead generation and business growth.
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Sales Tips: How to Improve your Bottom line for Sustainability
- Commit to your long-term vision for accomplishment(s) to stay on track and enjoy business success.
- Always consider the greater good of staff, business connections, and your community so that everyone can feel the ‘win.’
- Keep goals, priorities, and values in mind when researching and revising what no longer works well.
- Test specific strategies, one at a time, and teach peers to do the same so that more people will experience career and business enjoyment.
- Never underestimate anyone’s novel ideas; remember that each country operates differently.
- Share favorite learning moments with colleagues to realize new collaborative possibilities moving forward.
- Walk away from those who insult you, but use their negativity as motivators to prove, ‘Yes, you can!’
- At the end of all communications, ask the other party or people if they have questions to ensure clarification.
- ‘Don’t give up – find a better way!’
- Celebrate Success!
Today’s insights are provided to help you achieve the Smooth Sale!
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