How to Get a Low CPL for Your Online Business
If you're getting started in digital marketing, you need to master a few metrics to make sure your investment pays off and your online business is self-sustaining. Here on the Cademí blog, we've already covered ROI and ROAS, and today we want to know:
Do you know your business's CPL?
It's a hugely important metric that, ideally, should be tracked every single day. But if you're not sure what it is or you're struggling to bring the numbers down to get a low CPL, don't worry. In this article, we'll help you understand:
What is CPL?
First of all, it's important to understand what CPL is. It stands for cost per lead, that is, how much you spend to win each lead in your Google Ads or Meta Ads campaigns.
Imagine you run a campaign with a R$ 500 budget, it generates 50 visits to your landing page, and 5 people sign up with the requested information to access your lead magnet. In this case, your CPL was R$ 100. After all, the R$ 500 you invested brought in five contacts.
This is one of the most important stages in any sales funnel. After all, this is where you understand what your leads cost and can calculate whether your investment is worth it. A high CPL may indicate, for example, that:
- Your copy isn't compelling;
- Your offer or lead magnet needs adjusting
- There are problems with your target audience
“At Cademí, CPL is one of the main key performance indicators (KPIs) for making decisions during analysis and optimization. CPL, along with a few other data points, drives everything from changes in messaging to changes in how the marketing budget is split across campaigns,” explains Guilherme Garcia, media buyer at Cademí.
He adds that tracking your CPL also helps make sales more predictable, because you can estimate how many leads the campaign should bring in and how many leads you need to make one sale. “If you keep a close eye on it, you can predict how much you need to invest to hit your sales goal,” he concludes.
How to calculate CPL
Want to start calculating the CPL of your online business? As we mentioned earlier in this article, the math is very simple:
CPL = Amount spent on ads ÷ Number of leads generated
Let's use the example from before. You invested R$ 500 in a campaign and got 5 leads.
CPL = 500 ÷ 5 = 100
How to tell if your CPL is good
The next step, naturally, is figuring out whether your CPL is good. But there's no one-size-fits-all answer. It depends on your business's average order value and other variables.
“There's a global trend toward high costs per lead. In the United States, for example, the average is US$ 23,” Garcia explains. “The best way to know whether your CPL is good is to calculate your CAC, so you know how much you can pay for a lead and still make a profit.”
CAC is your customer acquisition cost, that is, the average amount your company needs to invest to win a new customer. Besides the cost of the lead, you'll also factor in every other investment: ads, sales team, marketing tools, and content production, for example.
Knowing this number will help you tell more precisely whether paying R$ 100 per lead is cheap or not.
How to get a low CPL
Already know your CPL needs to come down? You're not alone!
According to WordStream, a U.S. Google partner that specializes in solutions to improve online campaign performance, the cost of leads has risen 91% over the last three years.
That's why the big challenge is bringing CPL down. You can do that by, for example, improving your lead magnet and optimizing campaigns frequently, as Cademí's media buyer pointed out earlier in this article.
But if every digital creator is taking that same path, results tend to come more slowly. So the best route is to look for strategies like the Diamond Funnel.
Both because they're still new among creators and because they take leads into a completely different environment, one they won't associate with selling.
But what is the diamond funnel?
In short, it's a new approach that promises to transform online businesses by making it possible to acquire cheap, qualified leads.
“It's a strategy built to communicate with a cold audience. The idea is to work with front-end products and then move people up right after,” explains Matheus Benatti, CEO of Cademí and one of the creators of the diamond funnel.
The diamond funnel runs on an exclusive Cademí feature that lets you bring all your leads into your member area, even while they're consuming free content.
What's more, you can track every detail of each lead's consumption and send well-targeted messages thanks to SpyHub. The strategy, developed over the last two years, uses a three-lesson structure with specific goals that lead to the sale and, later, to the upsell.
It's not about offering a free product. It's about building an offer and giving the potential customer an experience.
Just to show how powerful the diamond funnel is at lowering CPL, here are three results from course creators who tested the strategy:
- Rayur acquired 3,600 leads in two months
- Diego Lima went from R$ 0 to R$ 997K without spending on paid traffic
- Patrícia Roberta grew her revenue 10x
Want results like these? To apply the diamond funnel to your business, you don't need to create a new product. You just need to find the diamond in your method (the very best of it) and offer it as one of the lessons.
The content will be delivered in the only digital environment your leads won't see as a sales environment, so they'll be more open to hearing what you have to say: your member area.
For it to work, though, you need a member area that lets you have unlimited students. Otherwise, the per-student fee will make the strategy unworkable.
Want to put the diamond funnel to work in your business? Click here and talk to one of our specialists.
