Module 1: Lead Generation Economics & Commercial Targets
Lesson 5 · Lead Generation Economics & Commercial Targets
Lesson 5 objective
Estimate different commercial values for different lead types using their probability of becoming customers and their expected contribution.
A phone call, a contact form and a booked consultation may all appear as one Google Ads conversion.
Commercially, they may be very different.
Equal conversion counts do not imply equal economic value.
1. Different conversion actions represent different intent
General contact form
Low friction and broad intent. Quality may vary substantially.
Quote request
Typically stronger commercial intent, but suitability still needs qualification.
Phone call
Potentially high intent, although duration and call quality matter.
Booked consultation
Often indicates greater commitment because the prospect has taken an additional step.
2. Calculate expected lead value
A simple expected-value model is:
Expected Lead Value = Probability of Becoming a Customer × Expected Customer Contribution
Suppose a customer is worth £1,500 contribution before media.
A general form has a 5% customer conversion rate:
5% × £1,500 = £75 expected value.
A booked consultation has a 20% customer conversion rate:
20% × £1,500 = £300 expected value.
Those two conversions should not necessarily be treated as equal signals.
3. Compare lead types using real downstream data
| Lead type | Lead → customer | Customer contribution | Expected lead value |
|---|---|---|---|
| Contact form | 5% | £1,500 | £75 |
| Quote request | 12% | £1,500 | £180 |
| Qualified phone call | 18% | £1,500 | £270 |
| Booked consultation | 20% | £1,500 | £300 |
4. Customer value may also differ
Lead types can differ not only in conversion probability but also in the customers they ultimately produce.
For example, phone enquiries might disproportionately relate to higher-value services.
A corporate quote form might produce lower volume but materially larger contracts.
So the stronger model becomes:
Lead Value = Customer Probability × Expected Contribution of That Customer Type
5. Avoid arbitrary conversion values
Do not assign:
Form = £10 · Call = £20 · Booking = £50
simply because the numbers “feel about right”.
Values supplied to optimisation systems should ideally have a defensible connection to observed commercial outcomes.
6. Start with directional values when data is imperfect
Perfect data is not always available.
If you know booked consultations convert around four times more frequently than generic contact forms, it may still be strategically useful to distinguish them rather than pretending they are identical.
The important requirements are:
Document the assumption
Know where the estimated value came from.
Use business evidence
Base estimates on CRM, sales or historical customer outcomes where possible.
Update the value
Replace rough assumptions as stronger evidence becomes available.
Avoid false precision
Do not pretend a £183.27 lead value is exact when the input assumptions are weak.
7. Calls need qualification too
A call conversion can be particularly misleading.
A ten-second accidental call and a twelve-minute conversation with a qualified prospect should not necessarily carry the same value.
Useful call dimensions include:
duration · answered status · sales qualification · new vs existing customer · final outcome
8. Different values improve later bidding strategy
Once Google receives better information about which conversion outcomes matter, optimisation can move beyond simply generating the maximum number of leads.
This becomes particularly important when we later cover:
offline conversions, lead scoring, enhanced conversions for leads and value-based bidding.
9. Expected value calculator
Interactive decision
A general form converts to customers at 4%. A booked consultation converts at 18%. Both currently send an identical conversion signal to Google.
Practical challenge
List every primary Google Ads lead type you currently track.
For each one record:
lead volume · qualification rate · customer conversion rate · expected customer contribution · estimated lead value
Highlight any lead types that Google currently treats as equal despite materially different business outcomes.
Knowledge check
1. A lead has a 10% probability of becoming a customer worth £2,000 contribution. What is its simple expected value?
2. Why might a booked consultation deserve a higher value than a generic form submission?
3. What is the main weakness of assigning arbitrary conversion values without downstream evidence?
4. When exact customer-value data is unavailable, what is the strongest approach?
Key takeaway
Different lead types should reflect different expected commercial values when the evidence supports it. Better value signals help move Google Ads away from counting leads and towards finding the outcomes the business actually wants.