THE SHORT ANSWER
Start from gross margin per job, not turnover. Multiply that margin by the share of it you are willing to spend winning the work, which for most home-improvement firms is 8 to 15 percent. Divide the result by the number of leads it takes you to close one job, typically 3 to 8 on exclusive volume. That is your ceiling. A EUR 10,000 solar installation at 22 percent margin, a 15 percent acquisition share and four leads per sale supports about EUR 82 per lead.
Most contractors decide what a lead is worth by looking at the asking price and judging whether it feels expensive. That is a comparison against nothing. A lead has no intrinsic value; it has a ceiling set by your own margin and your own conversion rates, and that ceiling varies by a factor of three between a landscaper and a heat pump installer knocking on the same front door.
The calculation takes ten minutes and it changes every supplier conversation you have afterwards. Rather than haggling downwards from whatever figure the seller opened with, you arrive already knowing the point at which the arithmetic stops working, and you can leave when it is crossed. It also shows you which of your own numbers you would need to improve in order to afford better leads.
The numbers, at a glance
The formula: gross margin per job, multiplied by an acquisition share of 8 to 15 percent, divided by leads per sale
Sustainable acquisition share: 8 to 15 percent of gross margin is what most home-improvement firms carry without starving overhead
Leads per sale on exclusive volume: 3 to 5 for solar and heat pumps, 4 to 6 for roofing and glazing, 5 to 8 for interior trades
Worked ceiling: a EUR 10,000 solar job at 22 percent margin, a 15 percent share and four leads per sale supports roughly EUR 82 per lead
Step one: use gross margin, not turnover
Turnover flatters everything. A EUR 18,000 heat pump installation looks like an enormous prize until you subtract the unit, the buffer tank, the pipework, the two fitters for three days and the commissioning visit. What is left is the only money available to pay for finding the customer, and in this sector it is usually between 18 and 30 percent of the invoice.
Use last year's completed jobs rather than your quoted margin. Quoted margin is an aspiration; completed margin already carries the reworks, the discount you gave in the final phone call and the day the scaffolding arrived late. If the gap between the two is more than four points, fix that before worrying about lead prices, because it is costing you more than any supplier is.
Step two: work out how many leads one sale really takes
Leads per sale is the number that moves the ceiling most, and almost nobody measures it directly. Break it into three rates and measure each one separately, because they fail for different reasons and have different remedies.
Contact rate. Of the leads delivered, how many did you actually speak to? Below 70 percent the problem is nearly always response time rather than lead quality.
Quote rate. Of the contacts, how many received a written price? A figure below half usually means the enquiry was never qualified on budget or ownership.
Win rate. Of the quotes issued, how many were signed? Twenty-five to forty percent is healthy on exclusive work; ten percent means you are in a race you did not know you had entered.
Multiply the three together and invert. Contact 80 percent, quote 65 percent, win 30 percent gives an overall conversion of 15.6 percent, which is 6.4 leads per sale. Run this on at least sixty leads before you trust it, because a thirty-lead sample can be out by a third in either direction purely on chance.
Step three: choose an acquisition share you can defend
The share of margin you spend on winning work is a policy decision, not a discovered fact. A firm with a full order book and two vans can justify 8 percent. A firm that has just hired a third crew and needs to feed it can justify 20 percent for a quarter, treating the excess as a capacity investment rather than a marketing cost.
What breaks businesses is drifting upward without noticing. Set the share as a number, write it on the same sheet as the ceiling, and review it quarterly against your actual utilisation. If you are spending 18 percent of margin on acquisition while your crews are at 70 percent utilisation, the money is buying activity rather than output.
Two corrections almost everyone leaves out
Lifetime value, where it genuinely exists. A bathroom fitter who reliably gets a second room from one customer in four can raise the ceiling by roughly 20 percent. A solar installer, whose customer will not buy again for fifteen years, cannot. Do not borrow this correction from an industry that is not yours.
The cost of the sales effort itself. A site survey plus a written quotation costs EUR 120 to EUR 250 in loaded time before anyone has bought anything. If your leads per sale is 6, you are spending EUR 700 or more on quoting for every job won, which sits alongside the lead price and often dwarfs it.
Apply both and you get a defensible number rather than a hopeful one. In practice the corrections tend to cancel for single-purchase trades and to raise the ceiling meaningfully for repeat-purchase ones.
Run the calculation on your own numbers this week
Pull the last twenty completed jobs and calculate real gross margin per job, not quoted margin.
Count contact, quote and win rates separately across at least sixty recent enquiries.
Fix your acquisition share as an explicit percentage and write it down.
Divide margin times share by leads per sale to get the ceiling, then subtract nothing and add nothing.
Compare the ceiling with every price on the market and delete the suppliers above it from your list.
How these figures were built
These figures are a benchmark model, not a survey. They combine an industry base range observed across Western European home-improvement campaigns with a country multiplier for local auction pressure. Treat them as a band to negotiate against, not a quote.
How Flock Leads prices this
A ceiling only helps if the prices you are testing it against are published rather than quoted per enquiry, so here is the whole Flock grid in one place.
Starter - 10 leads for EUR 750, which is EUR 75 per lead
Growth - 25 leads for EUR 1,750, which is EUR 70 per lead
Scale - 45 leads for EUR 2,925, which is EUR 65 per lead
Pro - 70 leads for EUR 4,340, which is EUR 62 per lead
Max - 90 leads for EUR 5,400, which is EUR 60 per lead
No retainer, no contract term, and no lead sent to a second business. Unused volume rolls over under the Flock Lead Promise.
Want leads like this in your pipeline?
Flock runs the campaigns, screens the enquiries and hands you only the ones that match your service area, job size and capacity. You pay per lead, not per month.
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Related answers
Frequently asked questions
What if my leads per sale figure keeps moving?
It should move seasonally and it should improve as you tighten follow-up. Recalculate quarterly using a rolling window of at least sixty leads. If it swings by more than two whole leads between quarters with no process change, your sample is too small rather than your market being volatile.
Should the ceiling include VAT?
Work entirely excluding VAT on both sides. Gross margin is calculated net, so a lead price quoted including VAT has to be converted down before comparison. Mixing the two is the most common arithmetic error we see, and it flatters the lead price by roughly a fifth.
My ceiling comes out below every price on the market. Now what?
That is a real answer, not a failure of the method. Either your margin is too thin, your conversion is too weak, or your job values are too low to support bought leads. Fix conversion first, since it is the cheapest of the three to move and it lifts everything else.
Does the ceiling apply per lead or per campaign?
Per lead, and it should be tested per source rather than in aggregate. Blending an expensive source with a cheap one produces an average that conceals a loss-making channel. Judge each supplier against the ceiling using its own cohort of at least sixty leads, and keep the cohorts separate for as long as you buy from both.
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