The formula
Lead value = average sale × profit margin × close rate. Add a retention/repeat factor if customers buy more than once.
Example: $1,200 average sale × 40% margin × 25% close rate = $120 per lead. If you close more or earn repeat purchases, lead value is higher.
Why it matters
When you know lead value, you can set a smart cost-per-lead target for ads, content, and SEO. If a lead is worth $120 and you're paying $40 to acquire one, that's a healthy 3x return.
It also tells you how much your site is actually worth. A site producing 30 leads/month at $120 each generates $3,600/month in lead value — that justifies a real investment in build and optimization.
Use the Lead Value Calculator
Run the Lead Value Calculator on this site to plug in your numbers. Then use that figure inside the Website ROI Calculator to project full-year payback.
Refining the number over time
The first calculation is an estimate. As you collect real data from your CRM (close rates by source, repeat purchase rate, true profit margin after fulfillment), refine the inputs quarterly.
Most small businesses underestimate lead value because they only count the first sale. Including 12-month customer value usually doubles or triples the lead value calculation.
FAQ
How accurate is this number?
It's an estimate. Refine it as you collect real data from your CRM.
Should I use first-purchase value or lifetime value?
Lifetime value (12-month at minimum) gives a more honest picture, especially for service businesses with repeat customers.