Start with your close rate
If you win 2 customers from every 10 comparable qualified leads, your close rate is 20%. That number should be calculated from real pipeline outcomes rather than optimistic estimates.
Keep different lead sources separate because a referral, a marketplace opportunity and a cold prospect list can have very different conversion rates.
Use gross profit, not only revenue
A R20,000 sale is not worth R20,000 to the business if delivery costs consume most of the revenue. Estimate the gross profit or contribution margin that remains after the direct cost of fulfilling the work.
That gives you a safer basis for deciding how much acquisition spend the sale can support.
Estimate expected value per lead
A simple expected-value calculation multiplies the probability of winning by the expected gross profit. If a qualified opportunity has a 20% close rate and an average gross profit of R5,000, the statistical gross-profit value is about R1,000 before other sales and operating costs.
You would normally want your acquisition cost comfortably below that expected value so there is room for sales effort, overhead and profit.
Measure the full funnel every month
Record leads received, contacted, qualified, quoted, won, lost and total acquisition spend. Then calculate cost per lead, cost per qualified lead, customer acquisition cost and revenue or gross profit generated by source.
This is why CRM discipline matters: without outcomes attached to the original lead source, it becomes difficult to know which marketing or marketplace spend is actually working.
Questions about this topic.
What is lead ROI?
Lead ROI compares the commercial return produced by a lead source with what you spent to acquire those opportunities. Use actual won revenue or gross profit where possible.
How do I calculate customer acquisition cost?
For a defined channel and period, divide the relevant acquisition spend by the number of new customers won from that channel.
What is a good cost per lead?
There is no universal number. A good cost per lead is one that produces profitable customer acquisition after your real qualification and close rates are taken into account.