Work out your cost per WON job, not your cost per lead, and then work out what you own when you stop paying. Those two numbers decide whether a lead platform is a tool or a tenancy, and most contractors never calculate either one. This guide gives you the arithmetic rather than a price list, because the prices move and the arithmetic does not.
We are not going to tell you never to buy a lead. We are going to make sure you know what one costs by the time it becomes money in your account.
The number nobody calculates
A lead is not a job. Between the two sit two conversion steps, and both of them are brutal on shared-lead platforms.
Cost per won job = cost per lead, divided by (the share of leads you actually quote), divided by (the share of quotes you win).
Put real numbers through it and the result surprises people:
| Cost per lead | You quote | You win | True cost per won job |
|---|---|---|---|
| $30 | 50% | 40% | $150 |
| $30 | 50% | 20% | $300 |
| $60 | 40% | 25% | $600 |
| $60 | 30% | 20% | $1,000 |
| $100 | 60% | 33% | $505 |
Now put that against the job. On a $2,000 job at a 25% gross margin you have $500 of margin, and a $505 cost per won job means you worked for nothing. On a $20,000 job the same $505 is noise.
So the honest rule is not "paid leads are bad". It is that paid leads have a floor job size, and the floor is set by your own win rate. Below it you are buying work at a loss and calling it marketing.
Why the win rate is lower than you think
On most platforms a lead is sold to several contractors at once. That is the business model, not a fault in it: the platform's revenue is the same lead multiplied.
Three things follow, and they are structural rather than bad luck.
- Your win rate is capped by the number of people it was sold to. Four contractors quoting one job means an average win rate of 25% before anything about you is considered.
- Speed beats quality. When four quotes land, the first one to phone usually wins. That rewards whoever is sitting by the phone, not whoever is best at the work.
- It pushes prices down. Everyone quoting knows they are one of several, so the discipline in your pricing is exactly the thing that loses you the job. This is the mechanism by which a platform designed to bring you work ends up training you to charge less for it.
The last one is worth sitting with. It is not a conspiracy. It is what any auction does to a seller.
Three costs that do not appear on the invoice
The unquoted lead. You pay for leads you never quote: wrong trade, wrong area, tire-kicker, or someone who never answers. Those are in the arithmetic above as the first conversion step, and they are the reason cost per lead flatters the platform.
Your time. An hour driving to look at a job you had a 25% chance of winning is a real cost. Four leads a week at an hour each is a working day a month, unpaid.
Review dependence. Once your visibility on a platform depends on your rating there, a single bad review changes your income. That is a different kind of exposure from an unhappy customer, and it is the reason review extortion works at all.
The tenancy question
Here is the test that matters more than the arithmetic.
Stop paying for thirty days. What still brings you work?
- A Google Business Profile you own keeps ranking.
- Customers who already used you keep calling.
- A referral relationship with a plumber or an architect keeps sending jobs.
- Your own website keeps being found.
- A lead platform stops. Immediately, completely, and it takes your review history's usefulness with it, because those reviews live on their site and not on yours.
That is the difference between an asset and a tenancy. An asset keeps working when you stop feeding it. A tenancy gives you exactly what you paid for this month and nothing else, and every month you pay again you are starting from the same place.
Ten years of paying for leads leaves you with ten years of jobs and no book of business. Ten years of doing good work and asking for the review on your own profile leaves you with something you could sell.
When buying leads is actually the right call
It is a tool. There are jobs it is the right tool for:
- A genuinely empty calendar. Idle crew costs more than an expensive lead. Buying work at thin margin beats paying wages for nothing.
- Testing a new area or a new service before committing to it, where the cost of finding out is the point.
- High-margin work where the floor job size is easily cleared.
- A season you know is dead, filling gaps rather than building a business.
In every one of those, three rules apply. Set a hard monthly cap before you start. Track cost per won job from week one, not cost per lead. Give it a fixed end date and decide again, because the failure mode is not spending too much in a month, it is spending a moderate amount every month for four years without ever running the numbers.
What to do with the same money instead
Not as a lecture, as a comparison. Whatever your monthly lead spend is, the same money buys:
- Photographs of finished work, which every one of the organic channels needs and most contractors do not have
- A morning a month asking previous customers for a review on the profile you own
- A relationship with two or three adjacent trades who see your work and can vouch for it
- A website that answers the questions customers actually ask before they call
Those are slower. They also still exist next year.
Common questions
Are paid lead platforms worth it for contractors?
It depends entirely on your cost per WON job, not per lead. Divide cost per lead by your quote rate and then by your win rate. On shared leads that figure is often 5 to 15 times the headline price.
Why is my win rate so low on lead platforms?
Because most leads are sold to several contractors at once, so an average win rate of 20 to 30% is structural rather than a reflection on you. Speed of response usually decides it more than quality does.
How do I work out cost per won job?
Cost per lead, divided by the proportion of leads you actually quote, divided by the proportion of quotes you win. At $60 a lead, quoting 30% and winning 20%, one won job costs you $1,000.
Should I ever buy leads?
Yes, when the calendar is genuinely empty, when you are testing a new area, or on high-margin work that clears your floor job size. Set a hard monthly cap and track cost per won job from the first week.
What is wrong with renting leads long term?
When you stop paying it stops completely, and you have built nothing. Your reviews and your ranking live on their platform. A Google Business Profile, past customers and referral partners keep working when you stop spending.
Do lead platforms push prices down?
Structurally, yes. When everyone quoting knows the lead was sold several times, the incentive is to undercut. That is what any auction does to sellers, and it is why disciplined pricing loses jobs on these platforms.
Where these figures come from
There are no prices in this guide, deliberately. Per-lead pricing varies by trade, by area and by month, so a table of it would be wrong quickly and wrong unevenly, and a contractor acting on a stale figure is worse off than one doing their own arithmetic.
What is here instead is the calculation, with worked examples using illustrative inputs so you can see the shape. Put your own cost per lead, quote rate and win rate in, and the answer is about your business rather than about the average of somebody else's.
The honest bit
We have a position on this and you should know what it is: we think most contractors are better served building things they own than renting attention. That is why this site has five guides on getting work without paying for it and this is the sixth.
But the version of that argument we have no time for is the one that says buying a lead is beneath you. Plenty of good businesses were built on bought work in the early years, and a contractor with an empty week and a crew to pay is making a perfectly rational decision.
The failure is not buying leads. It is buying them for four years without once calculating what a won job cost, and arriving at year five with nothing that belongs to you.
Do the arithmetic. Set the cap. Keep building the thing you own alongside it.
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