A lead is worth: job value × margin × close rate. If a job is worth $450, you keep 50%, and 3 in 10 leads book, a lead is worth $450 × 0.5 × 0.3 = $68. Pay less than that per lead and your ads make money.
The three numbers you need
1. What a job or customer is worth
Use your average job value. If customers come back, use what a customer spends in their first year instead: a salon client who rebooks every six weeks is worth much more than one visit.
2. Your margin
The share of each job you keep after materials, wages and running costs. If you don’t know it exactly, use a careful estimate and refine it later.
3. Your close rate
Out of every 10 leads, how many become paying work? Count calls and messages, not just form leads, and use the last few months rather than your best week.
Worked examples
| Business | Value | Margin | Close rate | A lead is worth |
|---|---|---|---|---|
| Plumber (average job) | $450 | 50% | 30% | $68 |
| Roofer (restoration) | $8,000 | 30% | 15% | $360 |
| Builder (renovation) | $25,000 | 20% | 8% | $400 |
| Hair salon (client, first year) | $480 | 50% | 40% | $96 |
| Dental practice (patient, first year) | $600 | 40% | 35% | $84 |
How to use the number
- Turn off ads whose cost per lead stays above it, once they’ve had enough budget to judge.
- Scale ads whose cost per lead sits well below it, raising budget a step at a time.
- Re-check your close rate every few weeks. If it drops, a lead is worth less and ads that looked fine may not be.
For online stores: break-even ROAS
Stores can do the same with return on ad spend (ROAS). Break-even ROAS = 1 ÷ your margin. With a 40% margin, you need $2.5 back for every $1 of ads (2.5×) just to break even. For comparison, the median Meta ROAS across 40,000+ brands was 1.88×1, which means plenty of ads run below break-even. See what a good ROAS is.
Questions
What if I don’t know my close rate?
Start counting this week: every lead, and whether it became paying work. Until then, use a careful guess and update it.
Should I include repeat business?
Yes, for businesses where customers come back. Use what a customer spends in their first year, so you don’t under-spend on ads that build regulars.
Is break-even the target?
It’s the limit. Aim well below it so ads leave profit after the cost of running them.
See what your own ads are worth
Tony checks every live ad each morning and tells you which to turn off, which to scale and why, using your numbers. The first audit is free and takes four minutes.
Sources. Dollar figures from studies are shown in your currency, converted at Reserve Bank of Australia rates for 9 October 2026 and rounded; each source has the original. Example amounts are the same number in your currency.
- Triple Whale, Facebook ads benchmarks: medians across 40,000+ brands, August 2025 – July 2026. www.triplewhale.com/blog/facebook-ads-benchmarks