How Much Do Service Direct Leads Cost?

Updated on January 24, 2024

How much do leads cost? This is a question that we frequently asked ourselves when we started our business over 15 years ago. Before we were able to effectively bring leads to our customers, we needed to have an idea of what they should pay for those leads.

However, we quickly realized that it doesn’t make sense for us to set a price per lead for our clients. Instead, we decided to let them choose a price point that works for their business.

We’ll explain in more detail in this article why we let our clients set their own cost per lead (CPL). You can also check out this video briefly explaining the logic behind this practice, along with how you can go about changing your CPL based on your results.

Lead Pricing is Based on Value

That realization came to us early on through an experience we had with two clients. Both were electrical contractors looking to grow their business. We began generating inbound phone leads for both companies.

Everything we did for each company was the same: same landing pages, same content, same advertising campaigns, same everything. We then started making their phones ring with people who needed an electrician.

Long story short, one of the clients saw tremendous success and remains a client 17 years later. The other client said they didn’t generate any revenue and canceled after one month.

How could one company see so much success while another fails from the same marketing service?

We realized that at the end of the day, the value that companies get from a lead generation service is largely due to the recipient of the leads. In other words, we were able to make both electricians’ phones ring, but only one of them was good at capturing those calls and turning them into business.

The company that turned leads into customers was able to overcome a major lead generation challenge that many small businesses encounter and saw more value in our leads as a result.

The Top Challenges that Small Businesses Face with Lead Generation

Once we made this realization, the answer to our question regarding what we should charge our clients was clear. It doesn’t make sense to set a standard price for our leads because the value of those leads can be varied for different clients.

Instead, we created a system that would allow our clients to decide what they would pay for our leads.

Our Clients Choose Their Cost Per Lead

The prospect of choosing your own PPC cost per lead might be daunting. Let's look at a simple example that illustrates why we let you choose (and change) your cost per lead.

In this scenario, we're going to look at two theoretical clients in our Marketplace. Each of these clients receives 10 leads from Service Direct. Looking at the graphic below, you can see that Company B got more value from 10 of our leads than Company A.

This means that when determining lead generation cost per lead, company B will have an incentive to set a higher CPL.

The Value of Paying More For Leads

If you are still wondering why a company might pay more for leads, there are a few key reasons.

Let's look at a few elements that might encourage a company to increase its average cost per lead:

Our Marketplace is a Competitive Auction. At any given point in time, multiple companies are bidding to win the same lead. While many factors determine who wins that lead, one of the biggest is the cost per lead.
Higher Bids Result in More Leads. The more you are willing to bid on our leads, the more times you will win leads. The best way to drive more leads is to increase your CPL so that you can win more leads in our Marketplace.
Your Business Needs May Change. We often see clients increase their cost per lead for the simple reason that they need more leads more quickly. You can also decrease your cost per lead or pause your campaigns entirely to reduce or stop leads.

The Cost Based On Value Graphic

How to Calculate Cost Per Lead

If you are considering signing up for our Marketplace, you can check the average lead volume in your area. You should also speak to an account specialist who will give you insight into a competitive cost per lead by industry in your area.

By doing this, you should get a much more accurate idea of what you might expect to pay per lead rather than using a cost per lead calculator, per se.

From there, it’s a matter of converting calls into booked appointments to better understand lead value.

To give you an idea of how much pay per call leads cost for your company, take a look at the average cost per lead for our clients. Remember that many other factors influence how much lead generation services cost; so take these ppc advertising costs per lead with a grain of salt.

Average Cost Per Lead By Service Category

If you don’t see your category listed above, you can visit our Pay Per Lead Costs page to see CPL ranges in other industries.

What Factors Influence Lead Pricing?

If you have used lead generation services in the past, those prices might be more than what you were paying for other types of leads.

Many factors influence these higher lead costs, including:

Not all leads are created equal, and the likelihood of turning a call into a booked appointment has a huge impact on the value of the lead. How valuable is it to have someone who needs your service call you directly to speak with you?
Those averages are what our clients have chosen to pay after analyzing the value of our leads for their business. So instead of asking yourself why our leads seem expensive, we’d prefer you wonder instead why our customers see that much value in the leads?’
The leads we send to our clients are exclusive, which means you won't be competing with other businesses for the same call.
You only pay for new potential customers, which we call Billable Leads. Lead quality is a top priority for us. This is why we have a robust in-house Quality Assurance team that ensures you don't pay for spam calls, wrong numbers, and other noise.
All Leads are inbound real-time phone calls or forms, meaning customers are ready to buy. That also means you need to be ready to answer the phone and book the job, even if you have to follow up with potential customers.

Location and its Role in Cost Per Lead

Of all the factors that affect lead generation pricing, where your business is located will most likely determine how much you'll pay for exclusive leads.

For example, a plumbing company located in Austin, Texas paid an average of $118 for leads, whereas the average cost per lead for plumbing businesses in Chicago, Illinois was only $54. These numbers are for the same time range and are both companies that work with Service Direct.

Cost Per Lead Map Plumbing

Why does location play such a major role in calculating cost per lead? Local economic pressures for specific home services industries differ from region to region, city to city, and even zip code to zip code. In some industries, certain regions may generally produce higher-budget projects. The weather in a certain part of the country may necessitate more frequent maintenance calls, increasing the supply of leads and driving down average CPLs in the region. In areas with many businesses offering similar services, competition for leads may drive up average CPLs.

Flexible Pricing Gives You More Control

When we set out to build Service Direct nearly 20 years ago, we asked business owners what they liked and didn’t like from other marketing services. We also asked them what they ultimately wanted in a marketing solution.

Our customers' feedback has helped shape our platform into the powerful solution it is today.

One of our guiding principles is to build lead generation technology that gives our clients the control and flexibility to grow their business on their terms.