What can you afford to pay for a lead, an MQL or an SQL?
Most CPA targets are a round number, an industry benchmark or last quarter's average. None of those know anything about your business. Enter your deal value, margin and funnel, and get a break-even and target CPA for every stage, plus which stage you have enough volume to bid on.
Your break-even and target CPAs
How this was calculated
How to use these numbers
- Treat break-even as a hard limit. If an account runs above it for a full sales cycle, each customer costs more than the profit they bring.
- Don't set Target CPA straight to the target figure. Start near what you pay today and lower it in small steps every couple of weeks, or the platform may stop spending.
- Judge channels on the deepest stage you can measure. A cheap lead that never becomes an MQL isn't cheap.
- ROAS targets only work if deal values are sent back to the ad platform as conversion values. Without that, use CPA.
- Check your conversion rates against your CRM every quarter. A small drop in close rate lowers every CPA above it.
How the calculator works
- Gross profit per customer. Deal value × gross margin, for the first year or the customer's lifetime.
- Break-even cost per customer. All of that gross profit, times the share of acquisition that's ad spend. Pay more and every customer loses money.
- Target cost per customer. The share of gross profit you're willing to spend (33% ≈ 3:1), times the ad spend share.
- Every stage above it. Multiply by the conversion rate from that stage to customer. If 25% of SQLs close, an SQL is worth a quarter of a customer.
- Where to bid. The deepest stage with roughly 30 or more conversions a month. Below that, the platforms don't get enough signal to bid well.
Three questions, three calculators
What will the platforms charge?
Cost per click, cost per lead and a monthly budget for Google, LinkedIn or Meta, from B2B SaaS benchmarks.
Can our unit economics pay for growth?
Your affordable ceiling against what your growth target really costs, and which lever to pull if they don't match.
Target CPA, answered
What's the difference between break-even and target CPA?
Break-even is the most you can pay before a customer costs more than the gross profit they bring. Target is what you aim for, leaving room for profit and for everything else the business has to pay for. Report against target. Never run above break-even for a full sales cycle.
What should my cost per MQL be?
Your target cost per customer × the share of MQLs that become customers. If you can spend €5,000 in ads per customer and 10% of MQLs close, an MQL is worth €500. Benchmarks can't tell you this, because they don't know your deal size or close rate.
Which stage should I bid on: lead, MQL or SQL?
The deepest stage that gets around 30 or more conversions a month. Deeper stages give the platform a better signal, but too few conversions and bidding becomes erratic. If you're below that, optimise for leads and MQLs together, or give MQLs a higher conversion value. More on that here.
Does ROAS work for B2B lead generation?
Only if deal values reach the ad platform, usually through offline conversion imports from your CRM. Without that, the platform sees a form fill with no value, and a ROAS target means nothing to it. Setting that loop up is part of Fix Your Funnel in 90 Days.