Cost per Lead vs Cost per Click

What is Cost per Click?

Cost per click, or pay per click, is an advertising option which is designed to drive traffic to websites. The advertiser only pays when a customer clicks on the ad.

What is Cost per Lead?

Cost per lead, or customer generation, is when businesses pay for potential sales leads, or data relating to active customers. A customer generation company has already prospected the customer on your behalf and found they have intent to buy, so all you need to do is contact the customer and close the sale.

Both of these strategies have been proven to increase sales, so which works out as better value for money?

Perhaps the most important difference to note is that with cost per click models, you are often paying for accidental clicks or people who were just curious and not looking for your business at all. With customer generation you only pay for genuine business leads that match your predefined criteria, so for the money you spend you are more likely to secure a sale through cost per lead. Though cost per lead is usually slightly more expensive, the returns should be greater so your return on investment is stronger.

Secondly, with pay per click you will need experts in your business who can monitor ad campaigns, control budget and optimise your campaign content. Ad spend needs to be regularly monitored and adjusted in relation to consumer trends. However, with customer generation, campaigns are managed by the external company, so all you have to do is convert the sale once you have the lead. This means you can focus on closing sales and developing your business, rather than having to create whole departments to manage your ad campaigns.

Lead generation also offers a lot more avenues for capturing customers. Unlike cost per click, which just uses adverts on websites to catch your audience’s attention, good customer generation companies will do cost per click advertising alongside native, SEO, CRM, content and many other techniques to make sure you are finding customers through lots of different channels simultaneously. This means a higher volume of new customers, access to cross channel marketing opportunities and all without your business having to become media experts, or manage a single campaign – all you do is buy the sales ready lead at the end of the process.