How To Calculate The Cost Per Lead With Pay Per Call?


Joe Troyer: Frank asks, “With lead generation, how do you calculate how much you charge per call, or per lead?” Alright, so if you’re doing lead gen or pay per call, how do you calculate the cost per lead? All right, so I’ve answered this probably a dozen different times in different webinars and different trainings, and I think I kind of answered this on an AMA maybe three weeks ago, but not this exact question. I wanted to take the time and actually go through this.

Joe Troyer: It’s much like the previous question from the AMA, right? Understand the price that you come up with, you shouldn’t be winging it. It shouldn’t be like, “Well, yeah, the client agreed to 62.50. Yeah, the client agreed to 30 bucks, so we’re going to go with 30 bucks.” If you are winging it like that, you are asking for a problem, and that problem is, is that you just undersold the shit out of your lead. Which means that you don’t have near as much money to actually get the lead. Which means if the cost of getting a lead isn’t significantly less than what you’re charging per lead, you’re not going to be sending them any leads, which means your customer is going to be pissed.

Joe Troyer: Unfortunately, I see way too many people jump into pay per call, jump into lead gen, have no idea what it’s going to cost to generate a lead, but then they go sell it. Don’t get me wrong, at least they got off their butt and they went and did something, right? But there is going to be a hard cost to generate that lead, okay? There is a process, that’s the good news, right? But the bad news is, is that the process is really called experience, right? You get to understand that when you understand the market. When you’ve been in a niche, right? Let’s say [loofing 00:02:05], and you’ve been in it in Ohio, you’ve been in it in Florida, you’ve been in it in California, you’ve been in it in Montana. You have multiple clients to be able to judge. You’re able to get an understanding of what an average cost per click is. You’ll be able to get an understanding of what an average conversion rate is, right? Then you can start to come up with some estimates to hedge your bets and really be able to calculate the cost per lead.

Joe Troyer: This is a question, if you’re in pay per call, that you should be asking yourself, but understand that there is no magical, mystical calculation. Some people like to say, “Oh, well, it’s the cost per click that you get from Google AdWords in their keyword tool times this number.” Bullshit. Google’s keyword tool is fucking horrible. I’ll show you keywords that say it costs 40 cents a click, where I’m actually paying six dollars a click. I’ll show you keywords where it says it’s six dollars a click and I’m paying 60 cents a click. If you’re judging your formulation of how much a lead costs on the cost per click and you’re getting it from Google’s keyword tool without actually putting up ads, you’re missing the fucking boat. And unfortunately, a lot of people in this space are teaching this bullshit fucking strategy.

Joe Troyer: Okay? At the end of the day, my job is to help you not deal with all the bumps, bruises, scratches, and bullshit that I dealt with building my agencies, okay? When you don’t have the experience, and you understand now that you shouldn’t be winging it, you should be doing what I call a market test, okay? A market test is simple. A market test is easy.

Joe Troyer: Your pitch, instead of saying, “I’ll charge you per call,” your pitch now to the local business owner is, “I will run this for free. Here are all the things that you’re doing wrong, or here’s all the things that you should be doing. You’re not doing it. I’ll run a market test for you, okay? You pay Google Ads like you have been, I’ll create a brand new account fixing all the problems that you aren’t doing. I’ll create landing pages, I’ll do this, I’ll do that, right?” And come up with some issues that they have. At the end of 30 days, we’ll take all the data from our market test, we’ll crunch that data, and then we’ll come back to you and we’ll share it with you. We’ll teach you what we’ve learned, okay? And together, Mr. Business Owner, you and I will come up with a pay per lead or a cost per call that moving forward makes sense to both you and to me. Okay? A number that you can make money with, okay? And a number that I can make money with, okay? Because if I’m not making anything, or if I’m going in the hole, obviously I can’t provide you more leads and help you grow your business.

Joe Troyer: Guys, this is like a whole little micro lesson on pay per call. If you’ve ever been interested in pay per call, this is one of the top three or top four topics that you should be thinking about, and is one of the top videos that you should be watching, as well.

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