Cost per lead or CPL is a digital advertising metric that defines how much a business spends each time they receive a lead online.
Today, setting up the cost per lead is easy and many B2B companies use this to track how many leads they are receiving. It is important to know exactly how much you are spending and how much each lead is bringing in.
If you use leads on Facebook, you might be wondering what is a good cost per lead on Facebook.
What is a Lead?
A lead may be defined as an advertisement on Facebook that allows you to find people who are most likely interested in your products or services.
Using an Instant Form you may collect data about potential customers including information such as their:
- Email address
- Phone number
- And more.
On an Instant Form, you can set up custom questions to understand more about your customers and target them better. Lead ads appear in the:
- Facebook News Feed
- Instant Articles
- In-stream Videos
- Instagram Stories
- Instagram Feed.
You can easily create a lead in Ads Manager or directly from your Facebook Page.
Once a person clicks on your ad, they will be asked to complete the form. After the form is filled up and submitted, you will be able to download the leads directly from Facebook Business Suite, Ads Manager, or connect it to a CRM system.
Why Leads on Facebook are Important
Leads on Facebook will allow you to:
- Identify and gather potential customers
- Collect information from subscribers for your newsletter
- Review the behavior of different customers
- Allow people to enroll in your programs.
What is a Good Cost Per Lead on Facebook?
To understand if you have a good cost per lead, compare your CPL to customer lifetime value.
If your CPL is higher than the lifetime value of a customer, then it is not worth it. You will be spending too much money to acquire the person compared to the generated revenue.
A good cost per lead for Facebook ads will be relative to your sales funnel. Every industry and company is different because they sell different products and services at different prices.
Therefore, a good cost per lead will defer from company to company. Since it might be difficult in some instances to calculate your cost per lead, many companies set up a ROAS (Return On Ad Spend) goal to help them meet their point of break-even.
You can set up the ROAS metric function in the Facebook ads manager and integrate it with your eCommerce platform.
On average, a good cost per lead on Facebook should range between $0 and $25.
How to Calculate CPL on Facebook
You can calculate your Facebook cost per lead by dividing the total amount you spend on Facebook ads by the number of new leads within a certain time period.
For instance, if you spend $200, and you generate 15 leads, then your cost per lead will be $13.33. This is obtained by dividing 200 by 15.
Sometimes you may not be able to measure your leads because of missing or partial data.
How to Improve Your Facebook Cost Per Lead?
Listed below are a few ways in which you can improve your Facebook cost per lead by lowering your total expenditure.
Create captivating headlines
People who scroll through Facebook may not have too much time to spend on a single ad. This is why you need to create an engaging headline that will attract your audience and encourage them to click on the ad.
Use testimonials from other customers
When potential customers see five-star ratings and great testimonials, it builds trust and encourages to click on them and visit your website.
These people are more likely to get converted to customers and your sales will increase.
Increase the load speed on your page
The longer your wait times, the more revenue you will lose. Ensure that your page loads within one to two seconds so that you prevent bounce rates and increase conversion rates.
Boost organic posts
Those who follow your page on Facebook are those who are genuinely interested in your brand. Try to boost your organic posts as much as possible to target your followers.
By limiting your ads to your followers and their friends only, you can cut down on expenses by not spending on leads that reach out to others who are not interested in your brand.
For instance, if you are based in France and you consistently boost organic posts on your page and limit it by demographics, you will spend much less per lead.
Limit form fields
When you create a Facebook lead form, keep the number of questions and steps as low as possible. The more fields that a person has to fill, the fewer chances of them becoming leads because they might not complete the entire form.
Thus, you will end up spending more money on each Facebook lead. The most basic information you will need is:
- The name
- Phone number
Always remember that it is very important to measure lead quality and find out whether your lead generation campaigns are worth it or not. It is critical to strike a balance between the amount you spend per lead and the quality of each lead.
For example, if you spend fewer costs per lead, you may acquire lesser lead quality. Rather, if you spend more for good quality leads, you may generate more revenue.