Lead to Customer Value
Free Lead to Customer Value calculator with clear step-by-step results.
About Lead to Customer Value
Traces a lead through three qualification stages to a won customer, then values that customer on gross-margin lifetime value rather than first-year revenue. Dividing back by lead volume gives the value of a single lead, which is the number that sets a defensible cost-per-lead ceiling.
Formulas
Customers won
Customers = leads x MQL rate x sales accepted rate x win rate
Value per lead
Per lead = customers x (first year value x lifetime years x gross margin) / leads
Worked example
With the default values below, Lead to Customer Value returns Lifetime value per lead of $665.28. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Leads per monthminimum 0
- 500
- Lead to marketing qualified rateaccepts 0–100 %
- 40 %
- Marketing qualified to sales acceptedaccepts 0–100 %
- 55 %
- Sales accepted to wonaccepts 0–100 %
- 25 %
- First year contract valueminimum 0 $
- 4,800 $
- Average customer lifetimeaccepts 0.1–20 years
- 3.5 years
- Gross marginaccepts 0–100 %
- 72 %
Results
- Lifetime value per lead
- $665.28
- Customers won per month
- 27.50
- Gross-margin lifetime value per customer
- $12,096.00
- Lifetime value added each month
- $332,640.00
Step by step
- 1Values used
- 2Customers won
- 3Value per lead
- 4Lifetime value per lead= $665.28
- 5Customers won per month= 27.50
- 6Gross-margin lifetime value per customer= $12,096.00
- 7Lifetime value added each month= $332,640.00
Assumptions and limits
- The result is derived only from the 7 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
- Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Frequently Asked Questions
Why use gross margin rather than revenue in lifetime value?
Because revenue you cannot keep is not value. Applying gross margin makes lifetime value comparable against acquisition cost, which is always a real cash outflow.
Should I discount future years?
For a rigorous figure, yes - a three-year lifetime discounted at 10% is worth roughly 10% less than the undiscounted sum. This version keeps it simple and slightly optimistic.