What Should a Home-Service Lead Cost?

A home-service lead above $35 exceeds the allowance in our plumbing example. It leaves less for overhead and profit, without proving a loss.

Use your job value, gross margin and booking rate to choose an acquisition allowance. That means the amount you set aside to win a new customer. Keep it separate from break-even, where the job covers costs without leaving a profit.

Work out your home-service lead allowance

Industry averages mix companies with different prices, margins and definitions of a lead. Use your own records to choose an allowance you can afford.

A bigger job can support more spending on leads when the margin and booking rate stay the same. If your team books fewer calls, the allowance per lead falls. These are relationships between your numbers, not trade benchmarks.

• Average job value. What a typical job from a new customer brings in. Use the first job unless you have records of repeat business.
• Gross margin. What is left of that job after labor, parts, materials and truck costs, as a percentage. This is the money that pays for marketing, overhead and profit.
• Booking rate. The share of genuine enquiries that turn into booked jobs. Count from your call log or booking records, not from memory.

Then choose the share of gross profit you are willing to spend to win a job. The examples below use 40 percent as a choice, not an industry rule. Check that the remainder covers your overhead and required profit.

1. Multiply average job value by gross margin. That is the gross profit on one job.
2. Multiply that gross profit by your chosen share. That is your acquisition allowance per booked job.
3. Multiply that allowance by your booking rate. That is your acquisition allowance per lead.

Above $35 does not automatically mean a loss

Say your average job is $350 and your gross margin is 50 percent. Gross profit is $175 per job. Choosing a 40 percent acquisition allowance gives you $70 per booked job. Booking half your genuine leads gives you a $35 allowance per lead.

A lead above $35 exceeds the 40 percent acquisition allowance this example chose. It leaves less for overhead and profit. Pre-overhead break-even is gross profit per job times booking rate: $175 x 0.5 = $87.50 per lead. That calculation leaves nothing for overhead or profit.

A real loss can only be established once overhead is included. Subtract overhead per booked job from gross profit, then multiply the remainder by booking rate. That gives the break-even cost per lead after overhead, assuming the job value, margin and booking rate hold.

The table uses illustrative inputs and the same 40 percent allowance throughout. Its limits are chosen spending allowances, not break-even figures. Put your own numbers in their place.

The roofing example has a larger allowance than the cleaning example because its gross profit per job is larger. Neither figure proves that a campaign is profitable. The trade guides for plumbers and roofing contractors cover how those different job sizes change the rest of the account.

Compare the allowance with what you really pay

Cost per booked job is ad spend divided by the jobs those ads produced. Identify which calls and forms came from ads with Google Ads call tracking, then match them to completed bookings. As of October 24, 2026, Google's call measurement guide describes call-length thresholds and imported call outcomes. A long call is not proof of a booked job.

Google's bid strategy guide describes Target CPA, a bidding setting that aims for an average cost per conversion. It is not a cap on each lead. Compare it with your lead allowance only when those conversions represent genuine leads. The budget guide shows how the same numbers turn into a monthly spend.

• Do not count every call as a new lead. Wrong numbers, sales calls and existing customers distort the calculation.
• Do not use job value instead of gross profit. The allowance comes from what remains after direct job costs.
• Ignoring the schedule. A cheap lead is worthless if the trucks are already full that week.
• Do not treat your chosen allowance as break-even. Include overhead before deciding that the first job loses money.

Use it inside Claude or ChatGPT

After connecting your Google Ads account, ask Claude or ChatGPT: Show cost per conversion by campaign for the last 30 days. Compare it with my chosen lead allowance. Flag campaigns above it, without calling them unprofitable or changing anything.

Check what each conversion means before treating it as a genuine lead. Supply your job margins, booking rate and overhead from your own records. Account conversion counts alone cannot establish profit per booked job. Compare the report with your call log before deciding which campaigns need investigation.

• AdvisorPPC is in the Claude connector directory: add AdvisorPPC to Claude.
• The AdvisorPPC plugin for Claude Code is on GitHub: AdvisorPPC plugin for Claude Code.
• Use ChatGPT? This page shows how to add AdvisorPPC in ChatGPT: AdvisorPPC in ChatGPT.

AdvisorPPC's Free plan reads Google Ads data. Use the report to investigate campaigns before making a budget decision. Keep any proposed spending change separate from the calculation.

Check your assumptions before changing your budget

Use first-job value unless your customer records support repeat business. If you include repeat visits, include their delivery costs too. Recheck your assumptions when job prices, direct costs or booking results change.

Start with a free Google Ads check to review campaign spending and recorded conversions. Match those leads to bookings before judging the first job's profit. Get my free Google Ads check. For the wider picture of running ads for a service business, the home services guide continues the task.