Most contractors set a revenue goal in January and a marketing budget in February, and the two numbers have nothing to do with each other. The goal comes from ambition. The budget comes from whatever was left over last year. Then in August the owner is confused about why the crews have gaps.
The fix is arithmetic, not motivation. If you know your average job value and your close rate, the number of leads you need is not a guess. It is a division problem, and it takes about four minutes to run.
Why do most contractors set lead goals backward?
The common approach is forward math: "I can spend $4,000 a month on marketing, so let's see what that gets me." That tells you nothing about whether you hit your number. It just tells you how much you are willing to lose before you get nervous.
Backward math starts at the finish line. You decide the revenue you want, then let the math tell you the lead volume, the appointment volume, the sales capacity, and the budget that revenue requires. Sometimes the answer is that your goal is fine and you are underspending by half. Sometimes the answer is that your goal requires 60 appointments a week and you have one rep. Both answers are useful in August. Neither is useful in December.
The fastest way to run this on your own numbers is our lead ROI calculator, which does the same math this post walks through and adds cost per acquired job on top. Read the logic here first so you know what the output means.
What is the formula for how many leads you need?
Four steps. That is the whole framework.
- Jobs needed = revenue goal / average job value. Use last year's actual average, not the number you wish it were. Pull it from your CRM or your closed invoices.
- Leads needed = jobs needed / lead-to-sale close rate. This is leads that turn into signed contracts, not leads that turn into appointments. If you only track appointment close rate, multiply your lead-to-appointment rate by your appointment close rate to get it.
- Monthly leads = leads needed / 12. Then adjust for seasonality, because no trade sells evenly across twelve months.
- Monthly cost = monthly leads x cost per lead. Add ad spend separately if you run your own campaigns, because ad spend and lead fees are two different line items.
A worked example
A roofing company wants to add $1,000,000 in revenue. Average job is $10,000. Lead-to-sale close rate is 25%.
| Step | Math | Result |
|---|---|---|
| StepJobs needed | Math$1,000,000 / $10,000 | Result100 jobs |
| StepLeads needed | Math100 / 0.25 | Result400 leads |
| StepLeads per month | Math400 / 12 | Result33 leads |
| StepAppointments per month at a 60% booking rate | Math33 x 0.60 | Result20 appointments |
| StepLead cost per month at $110 per lead | Math33 x $110 | Result$3,630 |
Thirty-three leads a month. That is a number you can manage, staff for, and hold a marketing partner to. "Grow the business" is not.
What close rate should you plug into the math?
This is where most plans break. Contractors use the close rate from their referral pipeline and apply it to paid leads, then wonder why the volume never materializes. Referrals close at 40-60% because the homeowner arrived pre-sold. A cold Meta lead does not.
| Lead source | Typical cost per lead | Typical lead-to-sale close rate |
|---|---|---|
| Lead sourceReferrals and repeat customers | Typical cost per lead$0 | Typical lead-to-sale close rate40-60% |
| Lead sourceOrganic search and Google Business Profile | Typical cost per lead$0-50 | Typical lead-to-sale close rate20-40% |
| Lead sourceShared marketplace leads | Typical cost per lead$25-85 | Typical lead-to-sale close rate5-12% |
| Lead sourceMeta advertising (self-run) | Typical cost per lead$25-110 | Typical lead-to-sale close rate10-20% |
| Lead sourceExclusive leads through a performance partner | Typical cost per lead$50-200 | Typical lead-to-sale close rate20-35% |
| Lead sourceExclusive booked appointments | Typical cost per lead$200-400 | Typical lead-to-sale close rate25-40% |
The close rate you plug in changes the answer more than anything else on the page. Take those same 100 roofing jobs:
- At a 25% close rate, you need 400 leads.
- At a 10% close rate, you need 1,000 leads.
- At a 7% close rate on shared leads, you need 1,429 leads.
Same revenue goal. Same crews. More than three times the lead volume, three times the phone calls, and three times the estimates that go nowhere. That is why cost per lead is a vanity number and cost per acquired job is the one that pays payroll. We break that comparison down in detail in exclusive vs. shared leads.
How many leads does that mean for your trade?
Average job value swings the answer hard. Here is what $1,000,000 in added revenue looks like across trades at a 25% lead-to-sale close rate. Adjust the job values to your own market.
| Trade | Typical average job | Jobs for $1M | Leads needed | Leads per month |
|---|---|---|---|---|
| TradeRoofing | Typical average job$10,000 | Jobs for $1M100 | Leads needed400 | Leads per month33 |
| TradeWindows | Typical average job$12,000 | Jobs for $1M84 | Leads needed336 | Leads per month28 |
| TradeSiding | Typical average job$16,000 | Jobs for $1M63 | Leads needed252 | Leads per month21 |
| TradeBath remodeling | Typical average job$18,000 | Jobs for $1M56 | Leads needed224 | Leads per month19 |
| TradeHVAC replacement | Typical average job$9,000 | Jobs for $1M111 | Leads needed444 | Leads per month37 |
| TradeInterior painting | Typical average job$5,000 | Jobs for $1M200 | Leads needed800 | Leads per month67 |
The pattern is obvious once you see it side by side. A painter needs roughly twice the lead volume of a roofer and more than three times the volume of a bath remodeler to reach the same revenue. If you run multiple verticals, run this table per vertical and add the monthly lead numbers together. That total is your real lead target, and it is usually larger than owners expect.
Adjust for seasonality before you commit
Dividing by 12 gives you an average, not a plan. Most exterior trades do 60-70% of their volume in six months. If your lead target is 33 a month, the real plan is closer to 20 a month in the slow half and 45 a month in the busy half, with campaigns started 6-10 weeks before the local surge so your pipeline is full when the phone starts ringing on its own. Our seasonal marketing guide maps that calendar by trade.
What does that lead count actually cost?
Once you have the monthly lead number, budget is straightforward. Take 33 leads a month and price it across channels:
| Channel | Cost per lead | Monthly lead cost | Estimated jobs per month | Cost per acquired job |
|---|---|---|---|---|
| ChannelShared marketplace leads | Cost per lead$60 | Monthly lead cost$1,980 | Estimated jobs per month2.3 (7% close) | Cost per acquired job$860 |
| ChannelSelf-run Meta ads | Cost per lead$55 | Monthly lead cost$1,815 | Estimated jobs per month5.0 (15% close) | Cost per acquired job$363 |
| ChannelExclusive leads | Cost per lead$110 | Monthly lead cost$3,630 | Estimated jobs per month8.3 (25% close) | Cost per acquired job$437 |
| ChannelExclusive booked appointments | Cost per lead$300 | Monthly lead cost$9,900 | Estimated jobs per month10.9 (33% close) | Cost per acquired job$908 |
Read the last column, not the second. The cheapest invoice produces the fewest jobs. And note that the exclusive columns hit the 100-job target while the shared column produces 28 jobs a year from the same lead count — you would need well over 1,000 shared leads to hit the same revenue, at which point the invoice is no longer cheap and your reps are running estimates for homeowners who already have three other quotes.
As a sanity check, most contractors should be spending 8-12% of target revenue on marketing. If your backward math lands far outside that band, one of your inputs is wrong. The full budgeting framework is in our contractor marketing budget guide.
Run your own numbers. Drop your average job value, close rate, and current lead cost into the ROI calculator and see your real cost per acquired job in about a minute. If the number surprises you, book a call and we will walk through where the leak is.
What if the lead number is bigger than your company can handle?
This is the most common outcome, and it is a capacity problem disguised as a marketing problem.
Sales capacity
A full-time in-home rep comfortably runs 12-18 appointments a week. At a 55% lead-to-appointment rate, that is roughly 25-35 leads per rep per week. If your plan calls for 60 leads a week and you have one rep, you do not have a lead problem. You have a hiring problem, and buying more lead volume before you fix it just burns leads at a lower close rate.
Follow-up capacity
Speed is the cheapest close-rate lever there is. Contacting a lead within five minutes rather than thirty makes you dramatically more likely to qualify it, and 35-50% of sales go to whoever responds first. If you can move your lead-to-sale close rate from 15% to 22% by answering faster and running a real follow-up sequence, your 400-lead requirement drops to 273 leads and your budget drops by a third. That is a bigger win than negotiating cost per lead. Start with speed to lead.
The four levers, in order of cost
- Close rate. Free to improve. Faster response, tighter follow-up, better estimate presentation.
- Average job value. Cheap to improve. Present better options, quote the full system instead of the patch, stop leading with the smallest package.
- Cost per lead and lead quality. Moderate. Moving from shared to exclusive raises the invoice per lead and lowers cost per acquired job.
- Volume. Most expensive. Only pull this lever after the first three are working, or you will scale a leaky funnel.
How do you check the math against reality each month?
Run the same five numbers every month and the plan corrects itself before the year gets away from you.
| Metric | Formula | What it tells you |
|---|---|---|
| MetricLeads delivered | FormulaCount | What it tells youAre you on pace for the monthly target |
| MetricCost per lead | FormulaSpend / leads | What it tells youIs the channel still efficient |
| MetricLead-to-appointment rate | FormulaAppointments / leads | What it tells youIs your call handling working |
| MetricLead-to-sale close rate | FormulaJobs / leads | What it tells youIs the input in your model still true |
| MetricCost per acquired job | FormulaTotal cost / jobs | What it tells youThe only number that decides scale or cut |
If cost per acquired job stays under 10% of your average job value, scale spend. If it drifts above 15%, fix close rate or job value before you add budget. Tracking discipline is covered end to end in how to track marketing ROI.
The short version
- Revenue goal divided by average job value equals jobs needed.
- Jobs needed divided by lead-to-sale close rate equals leads needed.
- Divide by 12, then reshape it around your season.
- Multiply by cost per lead to get the budget, and check it against 8-12% of target revenue.
- Compare that lead target against sales capacity before you spend a dollar.
Every contractor who says leads are too expensive is comparing cost per lead against nothing. Once you have the backward math, you know exactly what a lead is worth to you, which channels clear that bar, and how many you need each month to make the number.
If you want the math run against your actual close rate and job value, and a lead system built to deliver that monthly count through your own ad account, get started here.
Frequently asked questions
How do I calculate how many leads I need?
Revenue goal divided by average job value equals jobs needed. Jobs needed divided by your lead-to-sale close rate equals total leads. Divide that by 12 for a monthly target. Adding $1M at a $10,000 average job and a 25% close rate means 100 jobs, 400 leads, about 33 leads a month.
What close rate should I use if I do not track mine?
Use conservative industry-typical figures until you have your own data. Referrals close at 40-60%, exclusive leads at roughly 20-35%, Meta-generated leads at 10-20%, and shared marketplace leads at 5-12%. Pick the low end of your channel's range so the plan survives a bad month.
How many leads can one sales rep handle?
Most full-time in-home reps run 12-18 appointments a week comfortably. At a 50-60% lead-to-appointment rate that is roughly 25-35 leads per rep per week. If your lead math calls for more than that, you are hiring a rep before you are buying more leads.
What if I cannot afford the number of leads the math says I need?
You have four levers: raise average job value, raise close rate, lower cost per lead by moving to exclusive leads with better close rates, or lower the revenue goal to something the budget supports. Raising close rate is usually the cheapest lever because it costs follow-up discipline, not dollars.
Does the lead count change if I switch from shared to exclusive leads?
Yes, significantly. Shared leads close at 5-12% because three to five contractors get the same homeowner, so hitting 100 jobs can take 1,000 or more leads. Exclusive leads close at 20-35%, so the same 100 jobs take 300-500 leads. Fewer leads, fewer wasted estimates, lower cost per acquired job.
Frequently asked questions
How do I calculate how many leads I need?
Revenue goal divided by average job value equals jobs needed. Jobs needed divided by your lead-to-sale close rate equals total leads. Divide that by 12 for a monthly target. Adding $1M at a $10,000 average job and a 25% close rate means 100 jobs, 400 leads, about 33 leads a month.
What close rate should I use if I do not track mine?
Use conservative industry-typical figures until you have your own data. Referrals close at 40-60%, exclusive leads at roughly 20-35%, Meta-generated leads at 10-20%, and shared marketplace leads at 5-12%. Pick the low end of your channel's range so the plan survives a bad month.
How many leads can one sales rep handle?
Most full-time in-home reps run 12-18 appointments a week comfortably. At a 50-60% lead-to-appointment rate that is roughly 25-35 leads per rep per week. If your lead math calls for more than that, you are hiring a rep before you are buying more leads.
What if I cannot afford the number of leads the math says I need?
You have four levers: raise average job value, raise close rate, lower cost per lead by moving to exclusive leads with better close rates, or lower the revenue goal to something the budget supports. Raising close rate is usually the cheapest lever because it costs follow-up discipline, not dollars.
Does the lead count change if I switch from shared to exclusive leads?
Yes, significantly. Shared leads close at 5-12% because three to five contractors get the same homeowner, so hitting 100 jobs can take 1,000 or more leads. Exclusive leads close at 20-35%, so the same 100 jobs take 300-500 leads. Fewer leads, fewer wasted estimates, lower cost per acquired job.