Lead recovery & response
Contractor Lead Value Calculator
Works what a contractor lead is worth, including the work it leads to later.
Result
Lifetime jobs are modelled geometrically from your repeat rate, a 35% repeat rate implies about 1.5 jobs per customer. It is a reasonable estimate, not a substitute for pulling actual repeat data from your CRM.
Run the missed call calculatorHow the calculation works
Close rate times the gross margin on the first job, plus the margin on repeat work and referrals over the relationship. Home service customers return for maintenance, repairs and further work, which means a lead's value exceeds the first job by a meaningful multiple where the relationship is retained.
What moves the number
- Close rate from lead to job.
- Gross margin on the first job.
- Repeat work over the relationship.
- Referrals, which are strong in local trades.
Where this one goes wrong
Valuing a lead on the first job alone understates it substantially in trades where customers return, and that understatement is why contractors underinvest in lead sources and in answering the phone. Include the relationship. The discipline is that repeat and referral rates have to be measured rather than assumed, because an optimistic figure justifies paying more for leads than they can actually return.
Before you quote
- Include measured repeat and referral value, not assumed.
- Use gross margin rather than revenue.
- Apply a lower close rate to shared leads.
Questions
About this calculator
What is a contractor lead worth?
Close rate times the gross margin on the first job, plus repeat and referral value over the relationship. Valuing it on the first job alone understates it substantially in trades where customers return, which is why contractors underinvest.
How do I measure repeat value?
From your own records: how many customers from two or three years ago have had further work. It is measurable and rarely measured, and the actual figure is what makes the lead value defensible rather than aspirational.
Are shared leads worth less?
Considerably, because the homeowner is contacting several contractors and is frequently comparing price. Applying an exclusive close rate to shared leads overstates their value and is the usual reason a lead programme loses money.
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How to use this calculator
- Average ticket ($). Enter your own figure; the page starts at $850.
- Close rate (%). Enter your own figure; the page starts at 30%.
- Repeat customer rate (%). Share of customers who come back for another job. Used to estimate lifetime jobs per customer.
- Gross margin (%). Enter your own figure; the page starts at 45%.
The result updates as you type, so you can try a figure, see what it does to revenue value per lead, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Average ticket | $850 |
| Close rate | 30% |
| Repeat customer rate | 35% |
| Gross margin | 45% |
What comes out
| Result | Value |
|---|---|
| Revenue value per lead main result | $392.31 |
| Customer lifetime value | $1,308 |
| Lifetime jobs per customer | 1.5 |
| Maximum cost per lead | $176.54 |
Each lead is worth $392.31 in revenue and $176.54 in gross profit. Any lead source costing more than that is losing you money.
How sensitive the answer is
Holding everything else steady and changing only average ticket, this is what happens to revenue value per lead. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Average ticket ($) | Revenue value per lead |
|---|---|
| $425 | $196.15 |
| $638 | $294.46 |
| $850 example above | $392.31 |
| $1,275 | $588.46 |
| $1,700 | $784.62 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Average ticket ($)
- A money amount, starting at $850.
- Close rate (%)
- A percentage, between 0 and 100, starting at 30%.
- Repeat customer rate (%)
- Share of customers who come back for another job. Used to estimate lifetime jobs per customer.
- Gross margin (%)
- A percentage, between 0 and 100, starting at 45%.
What the results tell you
| Result | What it is |
|---|---|
| Revenue value per lead | The headline result. A money figure. |
| Customer lifetime value | A money figure. |
| Lifetime jobs per customer | A decimal figure. |
| Maximum cost per lead | A money figure. |
Keep going
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