Cost per lead is the average amount you spend to generate one lead. You divide total lead-generation spend by the number of leads produced. CPL measures top-of-pipeline efficiency, but it says nothing about lead quality or whether those leads become customers.

CPL is the number agencies love to show you because it is easy to make look good. A $20 lead means nothing if it never closes. Demand a view of CPL alongside close rate and CAC. A higher CPL that produces customers beats a cheap lead that wastes your sales team's time.

Example:

 You spend $3,000 on a campaign and generate 60 leads. CPL is $3,000 / 60 = $50.

What is a good cost per lead?

 It depends entirely on lead quality and your deal size. A high CPL is fine if those leads close at a high rate into large deals—Judge CPL against close rate, never alone.

Why can a low CPL be misleading?

 Cheap leads are often low-intent. They inflate volume while lowering close rate, raising your true cost per customer even as CPL looks good.