You calculate the maximum acceptable cost per enquiry (maximum CPL) by multiplying the margin one closed deal leaves you by the share of enquiries that close as deals. If one in ten contacts becomes a deal, you can pay at most a tenth of one deal's margin for a single enquiry. You get a more precise limit if you first subtract the sales cost of the deal from the margin.
This number is a limit, not a target. At that point advertising pays for itself but brings no profit. So you calculate your target CPL from your target customer acquisition cost (CAC).
How do I calculate the maximum acceptable CPL?
Maximum CPL = (margin per deal − sales cost per deal) × close rate
- Margin per deal is what you keep from a deal after direct costs (materials, delivery, subcontractors). It is not revenue. If the customer buys repeatedly, use the margin over their lifetime (LTV from margin).
- Sales cost per deal is the time spent on sales, site visits and preparing quotes, converted to one closed deal.
- Close rate is the number of closed deals divided by the number of enquiries in the same period. With one in ten contacts, that is 10%, or 0.10.
Why multiply by the close rate? At 10% you need 10 enquiries for one deal. If each costs X, one deal costs you 10 × X in advertising. That amount must not exceed what the deal leaves you.
The formula follows from CAC. The cost of one customer is CPL divided by the close rate, plus the sales cost per customer. Turn the equation around and you get the target CPL:
Target CPL = (target CAC − sales cost per customer) × close rate
What belongs in CAC is explained in the glossary entry What is CAC?, and the basics of CPL in What is CPL?.
What does the calculation look like in euros?
The example is made up and simplified so the logic is visible. A service company has an average deal of €5,000 excluding VAT and a 40% margin after direct costs.
| Figure | Value |
|---|---|
| Average deal value | €5,000 |
| Margin per deal (40%) | €2,000 |
| Sales cost per closed deal | €500 |
| Close rate | 10% |
Limit without sales costs: €2,000 × 0.10 = €200.
Maximum CPL = (€2,000 − €500) × 0.10 = €150
Check: at a CPL of €150, ten enquiries cost €1,500, sales adds €500, and the deal leaves €2,000 of margin. The result is zero.
The company wants to keep at least half of the margin from every deal, so its target CAC is €1,000.
Target CPL = (€1,000 − €500) × 0.10 = €50
Now assume the customer buys three times on average. The lifetime margin is €6,000. With a target LTV:CAC ratio of 3:1, the target CAC is €2,000 and the target CPL is (€2,000 − €500) × 0.10 = €150. So the same campaign is either too expensive or acceptable depending on whether the customer buys once or several times. How to read this ratio is explained in the article LTV:CAC ratio.
How does the close rate change the limit?
The same deal (margin €2,000, sales cost €500) at different close rates:
| Close rate | Enquiries per deal | Maximum CPL |
|---|---|---|
| 5% | 20 | €75 |
| 10% | 10 | €150 |
| 20% | 5 | €300 |
When the close rate doubles, so does the limit. Better qualification of enquiries and a faster sales response are therefore often a cheaper route to profitable campaigns than chasing a lower CPL. Why CPL alone is not enough is explained in the article Why CPL is not enough.
What are the most common mistakes?
- Revenue instead of margin. With €5,000 of revenue and a 10% close rate, you would get a limit of €500 instead of €150. At that CPL, every deal loses money.
- A close rate from too few deals. Three deals out of 25 enquiries is not a reliable 12%. Use a longer period or wait for more data.
- A mismatched denominator. If you calculate the close rate from all enquiries, compare it with the CPL for all enquiries. If you calculate it from qualified enquiries only, use the cost per qualified enquiry.
- Sales cycle lag. An enquiry from March closes in May. Comparing enquiries and deals from the same month underestimates the close rate.
- Figures from the ad platform instead of the CRM. The ad platform counts submitted forms. Only the CRM shows which of them became deals and from which channel. When a spreadsheet stops being enough is covered in the article Excel or CRM.
How do we use this in campaigns?
Before campaigns go live, we calculate the maximum and target CPL for each company. We then run the campaigns by target CPL and by the share of enquiries that become deals, not by the lowest CPL.
The public Naitors case reports CPL, not the limit: in one month (April/May 2026) Google Search brought 56 enquiries at a CPL of €14.57 (Naitors case study). The close rate and the margin are not part of the public case, so we do not calculate a limit for it.
How we connect Google Ads, Meta advertising and the CRM into one system for enquiries is described on the lead generation page.