Marketing ROI calculator: your profit leak detector

Want help interpreting these results? Our strategists analyze unit economics daily across dozens of industries.  Schedule a consultation to discuss your specific numbers →

How to use this calculator (and what the results actually mean)

Enter your real numbers. Not your goals, not your best month ever: your actual current metrics.

Ad spend: Your total monthly paid advertising investment.

Cost per qualified lead: Not every lead. Just the ones that actually qualify for your offer. If you don’t track this separately, that’s actually your first problem to solve.

Close rate: Of qualified leads, what percentage become customers? Be honest here.

Average deal size: Your typical transaction or contract value.

Profit margin: After fulfillment costs, what percentage is actual profit?

The calculator will show you four break-even scenarios. Here’s the exciting part: Only one needs to change to flip your economics.

How the math works

Gross profit per deal = Average deal size × Profit margin.

Expected gross profit per qualified lead = Close rate × Gross profit per deal.

Break even when Cost per qualified lead = Expected gross profit per qualified lead.

The tool compares your current CPL to that number and shows the exact target for each lever: CPL, close rate, deal size, and margin.

The day everything clicked about marketing profitability

For years, we tracked cost per lead religiously. Had a beautiful dashboard showing our Google Ads CPL trending down month after month. We’d celebrate every decrease.

But here’s what we were missing: our marketing existed on an island.

Google Ads was its own little universe with its own metrics. We had no idea if those leads were actually qualified. No clue what happened after they converted. Marketing success and business success were completely disconnected.

Everything changed when we finally set up offline tracking with our CRM. Suddenly we could see the full picture: which leads were qualified, which ones closed, what they spent.

That’s when we discovered the metric that actually matters: unit economics per qualified lead. It’s your gross profit per lead minus your cost to acquire that lead.

The feedback loop between marketing and actual revenue transformed everything. We could finally see that some of our “expensive” campaigns were actually our most profitable. And some of our “cheap” leads were costing us money.

Why expensive leads are often cheaper (seriously)

This completely changed how we think about PPC management.

Cheap leads are cheap for a reason. They’re either unqualified, wrong-fit, or coming from sources that attract price shoppers. You get really good at attracting people who will never buy.

When you understand this, everything changes.

We see this pattern everywhere now:

• Healthcare: Practices targeting “free consultation” get flooded at $30/lead but barely break even. Those targeting specific procedures pay $300/lead and profit wildly.
• Legal: Firms bidding on “cheap lawyer” struggle while “experienced trial attorney” keywords print money at 10x the CPL.
• SaaS: “Free trial” leads cost $20 and convert terribly. “Enterprise demo” leads cost $500 and become six-figure accounts.

The expensive leads aren’t actually expensive. They’re profitable.

The revelation that changed everything for us

We were optimizing for the completely wrong metric. Celebrating lower CPLs while our marketing budget allocation made no sense.

Here’s the crazy part: once you see it, you can’t unsee it. Cost per lead is just a vanity metric. It’s like celebrating how many business cards you handed out.

The real game is unit economics. And once you understand your unit economics, you can bid with total confidence while competitors guess.

Ready to analyze your actual unit economics? Most agencies don’t even know how to calculate this properly. Talk to a strategist who understands the real math →

The reality check: Getting accurate data takes work

Let me share what it actually takes to get these numbers right.

First challenge: tracking qualified leads separately from all leads. Most businesses dump everything into “leads” and wonder why the math never works. It takes about a month of disciplined tracking to get clean data.

Second challenge: actually reviewing these numbers weekly. Takes 30 minutes once you build the system. Most never build the system.

Third challenge: being honest about your real profit margins after all costs.

This isn’t sexy work. But here’s what’s exciting: the businesses that do this have a massive advantage. They know exactly what they can afford to pay and still profit.

The four levers of marketing profitability (which one is yours?)

Lever 1: cost per lead reduction

This is where everyone starts. Usually where they should finish.

If your break-even CPL is dramatically lower than current, you might be playing the wrong game entirely. Different targeting, different platforms, or different positioning could transform everything.

But here’s what most people miss: if you’re within reasonable range of break-even CPL, the other levers are often easier to pull. See our guide on how much to spend on Google Ads for testing new approaches.

Lever 2: close rate optimization

This is where things get interesting.

Low close rate with qualified leads? That’s actually good news. It means you have a sales process opportunity, not a marketing problem. Conversion rate optimization starts with your follow-up, not your landing page.

One client discovered something incredible: just calling leads within 5 minutes instead of 24 hours doubled their close rate. Same leads, same cost, transformed economics.

Takes about two weeks to fix a follow-up process. Most businesses would rather spend another $10,000 on ads. But those two weeks can change everything.

Lever 3: average deal size expansion

This is my favorite lever because it’s so overlooked.

Can you add a premium tier? Bundle services differently? Focus on customers with bigger problems?

Professional services firms blow my mind with this one. They’ll have a $2,000 project that could easily be a $10,000 engagement with different positioning. Same effort, 5x the revenue.

I’ll be honest: we should have more premium tiers than we do. Working on it. You probably should too.

Lever 4: margin improvement

This one’s uncomfortable but crucial.

Most businesses have no idea what their real margins are. They know revenue. They know some costs. But actual profit margin per customer after everything? Mystery.

Calculating real margins takes a full day of spreadsheet work. Nobody wants to do it. But everyone who does it discovers something shocking about their business.

If your calculator shows you need impossible margins to break even, you’re selling the wrong thing to the wrong people at the wrong price. That’s actually valuable information.

What your competitors already know (that you’re about to learn)

Smart businesses understand unit economics deeply. And it gives them superpowers.

When you know your max profitable CPL is $200, you can bid confidently. Test channels others avoid. Scale aggressively while they hesitate.

But here’s the really exciting part: you spot opportunities others miss completely.

Directory listings that seem expensive? Not when you understand lifetime value and website authority.

Premium ad placements others avoid? Perfect when your margins support it.

High-touch sales processes competitors won’t invest in? Exactly what high-value clients expect.

The pattern we see across every successful campaign

After working with hundreds of campaigns, the pattern is clear.

Successful campaigns track unit economics religiously. Not monthly, not quarterly: continuously.

They optimize the easiest lever first. Sometimes that’s price. Sometimes it’s qualification. Rarely is it spending more on ads.

They understand their competitive ceiling: the maximum they can profitably pay while maintaining reasonable margins.

They document everything. Which sources produce which quality leads at which costs with which conversion rates.

This isn’t complex. It’s discipline. And discipline creates competitive advantage.

Your profit roadmap starts with one number

Run the calculator above. Get your number.

If you’re already profitable per lead: incredible! Scale immediately. Every day you wait is money left on the table.

If you’re not profitable: the calculator just gave you a gift. It tells you exactly which lever gets you there fastest.

Some businesses need one small adjustment. Others need fundamental restructuring. Either way, now you know.

Ready to fix your profit leak permanently? Most of our clients discover their real constraint within the first strategy session. Schedule time with a strategist who gets it →

The moment everything changes

I love this moment. It’s when you realize you’ve been measuring the wrong thing all along.

Every day you chase lower CPL without understanding unit economics is a day you’re playing the wrong game.

But now you know better. You understand what actually drives profit. You have the calculator to prove it.

The businesses winning in your market aren’t smarter or luckier. They just measure what matters.

Your competitors are hoping you keep chasing vanity metrics. That you’ll keep celebrating lower CPLs while they grab all the profitable customers.

The calculator is right there. Your real numbers are waiting.

This is where everything changes.

FAQ

How do you calculate break-even?

Expected gross profit per qualified lead = close rate × average deal size × profit margin. You break even when that equals your cost per qualified lead. This is the foundation of unit economics that most businesses never calculate.

Does ad spend change break-even?

No. Ad spend scales outcomes but doesn’t change your break-even point. Whether you spend $1,000 or $100,000, your unit economics stay the same. Break-even only changes when you improve CPL, close rate, deal size, or margin.

Should I use lifetime value (LTV)?

Start with first-transaction economics to avoid overestimating profitability. If you’re not profitable on the first sale, LTV won’t save you. Once you dial in first-transaction profit and have reliable retention data, run a second scenario with LTV for scaling strategy.

What if the required close rate is over 100%?

That means profitability is mathematically impossible with your current numbers. Don’t panic. This is valuable information. Focus on improving deal size, margin, or CPL first. Often, a small pricing adjustment or targeting shift solves everything.

Why track qualified leads separately?

Because mixing qualified and unqualified leads destroys your data. A 2% close rate might actually be 20% on qualified leads and 0% on tire kickers. Without this separation, you can’t identify which lever to pull for profitability.

How often should I recalculate?

Weekly during active optimization, monthly once stable. Market conditions change, competitors adjust, and your own processes improve. The businesses crushing it treat these numbers like vital signs – constantly monitored, immediately acted upon.

What’s a good profit margin to target?

Depends on your industry, but here’s what matters: know your real margin after all costs. Service businesses often think they’re at 70% but are actually at 30% after labor and overhead. Product businesses at “40%” might be at 15% after returns and support. Calculate honestly.

What if my CPL already beats the break-even number?

Scale carefully. Increase budget until you hit capacity or see declining unit profit. Keep monitoring close rate and margin as spend rises. You’re in the enviable position of having profitable unit economics – now it’s about controlled scaling without breaking what’s working.

The implementation checklist

Based on your calculator results, here’s your action plan:

If CPL is your constraint:

• Audit current targeting for quality, not just cost (2 hours this week)
• Test premium placements you’ve been avoiding (set up one test campaign)
• Review qualification criteria to pre-filter better (1 hour to document current criteria)

If close rate is your constraint:

• Map your follow-up timeline: speed beats perfection (1 hour today)
• Record sales calls to identify where deals stall (implement this week)
• Test different qualification questions upfront (write 5 new questions now)

If deal size is your constraint:

• Survey closed deals about problems you didn’t solve (send email today)
• Create a premium tier this week (2 hours to outline it)
• Bundle services instead of itemizing (1 hour to restructure pricing)

If margin is your constraint:

• Calculate real fulfillment costs including time (full day project)
• Identify which clients are actually unprofitable (run the analysis this week)
• Raise prices or reduce service scope (make the decision today)

Pick one lever. Fix it this week. Run the calculator again.

Watch what happens.

Note: This calculator is based on simplified unit economics. Real business analysis should include customer lifetime value, overhead allocation, and seasonal variations. But if you’re not profitable on first transaction, those complications won’t save you.