07:58
Why cost per lead is a misleading metric in solar
Today we’re talking about cost per lead.
Which, honestly, is a boring topic.
No one really likes it.
Solar and renewables companies ask all the time whether they should be optimising for cost per lead, or something else entirely.
The short answer is simple:
You should focus on cost per acquisition per marketing channel.
That’s the metric that actually matters.
That said, cost per lead isn’t useless.
It’s just often misunderstood.
There is such a thing as a cost per lead that’s too high.
And there is definitely such a thing as a cost per lead that’s too low.
Both cause problems — just in different ways.
This video is a rant based on what we’ve seen across campaigns: why cheap leads aren’t always good leads, how volume creates hidden risk, and why paying more can sometimes be the most profitable decision you make.
For context, this video was originally recorded on 5 December 2024, views & strategies may have changed since.
Featuring
Video transcript
Hello. Today we’re going to talk about cost per lead. Boring—no one likes cost per lead. Solar and renewables companies often ask whether they should focus on cost per lead or something else. The simple answer is that you should focus on cost per acquisition per marketing channel. That’s it. However, cost per lead can still be a useful metric, and it’s one that you can influence.
There is such a thing as a cost per lead that’s too high, and there’s also such a thing as a cost per lead that’s too low. We’ve seen both. A cost per lead that’s too high is fairly obvious. If you’re paying £200 per lead and you’re not closing at least one in two, then you’re probably not acquiring customers profitably and that channel isn’t working for you.
The more confusing one is a cost per lead that’s too low. Why wouldn’t you want £1 leads? There are a few reasons. Unless you’ve had some kind of viral moment or you’ve created an ad that still has high friction and strong qualification, extremely low-cost leads usually come from unrealistic offers or claims. Things like massive discounts, free iPads, free EV chargers, or bundles that sound too good to be true. These attract enquiries that are difficult to deal with—people who want something for nothing and often haven’t read the details properly.
Another way people drop their cost per lead is by removing qualification entirely. They’ll ask for nothing more than name, email, phone number, and postcode. With Meta lead forms, this can become so frictionless that people submit without even realising what they’re doing. We’ve seen cases where people said their kids filled the form in—literally toddlers—because it was that easy.
The real issue with very low-cost leads isn’t just quality, it’s volume. Buried inside a pile of low-quality enquiries might be three or four absolute gold-dust prospects: £15,000 systems, great customers, people who want to work with you rather than chase price. But are they going to get the time, care, and bespoke attention they deserve when you’re dealing with 200 leads instead of 20 or 40? Probably not.
You can put systems, automations, and processes in place, but the reality is that more enquiries mean more complexity. And that increases the risk of letting the best opportunities slip through the cracks. That’s the last thing you want, because cost per acquisition is your true north star. Everything comes back to that.
For example, you might have an ad generating leads at £100 each. On the surface, that looks terrible. But if you’re closing 50% of those leads, your cost per acquisition is £200. If your average deal value is £10,000, that’s actually fantastic. You absolutely should not turn that ad off.
On the flip side, you could have an ad generating £2 leads. Sounds amazing—until you realise you’re closing one in a thousand. That’s a £2,000 cost per acquisition, which is ten times worse than the “expensive” lead example. You start to see how too many cheap leads can actually be a bigger problem than a smaller number of higher-quality ones.
So that’s my rant for today. This doesn’t mean we only generate expensive leads. We’ve run campaigns at £14 cost per lead using purely rapport-focused video ads—no gimmicks, no free iPads. But you do need to consider that paying slightly more for significantly higher-quality enquiries can often be the more profitable option in the long run.
I’ll catch you in the next one.
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