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What would a month of ads bring in?

Divide your monthly ad budget by your cost per lead to get leads, multiply by your close rate to get customers, and multiply customers by your average sale and repeat purchases to get a year of revenue. This calculator does that math on your own numbers and tells you how much profit comes back for every $1 of ads.

What one inquiry costs in ads. Not sure? Leave it; it's the first number we measure.
Leads / month33
New customers / month6.7
Cost per new customer$150
First-sale revenue$5,333
12 months of revenue from one month of ads$10,667
Profit per customer, 12 mo$800
Profit back per $1 of ads$5.33
Healthy. Each customer earns back more than 3× what they cost to win.
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How it's calculated

  1. 1Leads = monthly budget ÷ cost per lead.
  2. 2New customers = leads × the share of leads that buy. (For an online store, every first order is already a customer.)
  3. 3Cost per new customer = monthly budget ÷ new customers.
  4. 412 months of revenue = new customers × average sale × (1 + repeat purchases in a year).
  5. 5Profit back per $1 = (average sale × (1 + repeats) × margin) ÷ cost per new customer. Above $3 is healthy; under $1.50 loses money once costs are counted.

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Questions

+What is a good cost per lead?

There isn't one number: it depends on what a customer is worth to you. Use this calculator backwards: slide cost per lead up until profit back per $1 drops under $1.50. That's the most you can afford to pay for a lead.

+Are these results a promise?

No. They're the math on the numbers you enter. Your real cost per lead is only known after a couple of weeks of live ads, which is the first thing we measure.

+Why count repeat purchases?

Most of the profit from a customer usually comes after the first sale. Judging ads on the first sale alone makes good campaigns look like losers.

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