How many leads should marketing generate? Do the math backward
As many as your revenue goal needs, given your own close rate. Start from money, not from a lead count someone quotes you.
| Step | Formula | Where the number comes from |
|---|---|---|
| 1. Customers needed | New-revenue goal ÷ average value of a new customer | Your invoices |
| 2. Booked calls or estimates needed | Customers ÷ close rate (booked → paid) | Your calendar and invoices, last 3 months |
| 3. Leads needed | Booked ÷ booking rate (lead → booked) | Your call log, forms and texts |
| 4. Most you can pay per lead | Average customer value × your target marketing share ÷ leads per customer | Your margin |
Use your own last three months for every rate. If you don't know your close rate, that is the first number to fix: without it, no lead count means anything.
The US Small Business Administration puts it simply:
"Plan to compare your marketing and sales costs to the revenue it generates." (SBA: Marketing and sales)
The monthly marketing report to ask for
One page, by source (Google Ads, Google Business Profile, organic search, Meta, ChatGPT, referrals). Six rows.
| Row | What it counts | Why |
|---|---|---|
| Spend | Ads plus fees, per source | The cost side |
| Leads | Answered calls, forms and texts from real prospects | Not button taps, not spam |
| Booked | Appointments, estimates or consults on the calendar | First sign of intent |
| Won | Customers who paid, and the revenue | The only result that pays bills |
| Cost per customer | Spend ÷ won | Compare sources on this |
| Next month | One change and why | A report without a decision is a scrapbook |
Ask for each lead's source to come from your own records: the booking form, the call log, and "How did you hear about us?" Then check two rows against your calendar and invoices yourself.
Numbers that look like leads but aren't
Platform dashboards count actions, not customers. Three to watch:
- Google Business Profile "Calls". This is "The number of times a customer clicked on the call button on your Business Profile" (Google): taps, not answered calls.
- Google Ads "Conversions". The column shows whatever actions are set as primary: "Only the primary conversion actions your campaign optimizes toward will appear in the “Conversions” and “Conversion value” columns in your campaign report" (Google Ads Help). If page views are set as primary, they count. At an accounting firm we run marketing for, Google's "Conversions" column was not real bookings: one stretch showed 1, 2, 1 and 0 while real bookings were 2, 3, 0 and 0, and the account had auto-made goals such as "About Us" page views set as primary.
- Clicks and impressions. At the same firm, its first guides, live 7–15 days, earned 39,114 impressions and 340 clicks. Five visitors clicked "book"; none booked. Guides started producing bookings only at 2–6 weeks old: by November 11, 11 people had booked after landing on a guide.
Is my marketing working, or just busy?
Look for the drop between booked and paid. Most reports stop before it.
At that firm, across Google, Meta and ChatGPT ads, about $6,100 was spent from October 1 to November 4. Those ads brought about 13 booked calls and $0 in new-client revenue. A report that stopped at "13 bookings" would have looked fine.
Two ways to close the loop:
- Send won customers back to the ad platform. "By importing offline conversions, you can measure what happens in the offline world after your ad results in a click or call to your business." (Google Ads Help) See tracking a lead from Google Ads to a booked job.
- Look at what happens after the lead. Unanswered calls and slow replies lose leads your marketing already paid for. See missed calls and speed to lead.
Red flags in an agency report
| You see | Ask |
|---|---|
| Rankings, impressions and clicks only | How many of these became booked calls? |
| "Conversions" with no definition | Which actions are set as primary? |
| Leads with no source | Which channel did each one come from? |
| Calls counted, not answered | How many did we pick up? |
| Totals that never match your calendar | Can we reconcile last month line by line? |
Example
An HVAC company, US dollars
Goal: $30,000 a month in new-customer revenue. Average new customer: $1,500, so 20 customers. Close rate on estimates: 50%, so 40 estimates. 70% of leads book an estimate, so about 57 leads a month. If marketing is 10% of that revenue ($3,000), the most it can pay is about $53 a lead.
A family law firm, Canadian dollars
Goal: 4 new retainers a month at $6,000 each. Consult-to-retainer: 40%, so 10 consults. 50% of inquiries book a consult, so 20 inquiries. The agency's report shows 60 "conversions" a month. Most turn out to be page views set as primary. Real inquiries: 14. The plan needs 20.
A dental practice
Report says 300 "calls" from Google Business Profile. The phone system shows 180 answered, 40 new-patient calls, 25 booked, 18 showed up. The useful number is 18, and the leak is the 120 calls that weren't answered.
Different for you?
- You're setting the budget first: how much to spend on marketing.
- Leads come in but few book: website not getting leads.
- Calls go unanswered: what missed calls cost.
- You want Google Ads to learn from real customers: offline conversion tracking.
- You're about to sign with an agency: contract terms to check.
- You'd rather have every lead answered and booked: Conversion Agent.