Are Your Leads Actually Profitable? Use This Calculator to Find Out

I spent three years in this business thinking I knew which lead sources were working.

I was wrong about most of them.

It wasn't until I actually sat down with a spreadsheet and ran the numbers that I realized: Thumbtack was costing me $52 per lead with a 14% close rate. HomeAdvisor was $38 per lead at 18%. And Angi? $41 per lead, 11% close rate. I was defending Thumbtack's "brand quality" while it quietly cost me $1,200 more per month than HomeAdvisor to get the same number of jobs.

The worst part? I didn't know. I was operating on instinct and reputation, not data. And instinct is expensive.

If you're not actively measuring lead profitability, you're leaving money on the table. Here's how to stop.

The Math That Actually Matters

Lead profitability isn't complicated, but it requires you to track four numbers:

1. Total spend on a platform (per month, per quarter, per year — pick a timeframe)
2. Total leads received from that platform in the same period
3. Total revenue from jobs you closed that came from those leads
4. Your close rate for that platform

From there, the calculation is straightforward:

Cost Per Lead = Total Spend ÷ Total Leads Received

ROI = (Total Revenue ÷ Total Spend) × 100

Profit Per Closed Job = (Average Job Value ÷ Cost Per Lead) - Cost Per Lead

Let me show you what this looks like in practice.

Real Numbers: My Q4 Platform Breakdown

Last quarter, I ran four lead sources simultaneously with identical budgets. Same service area, same response protocol, same team handling the leads. Here's what came back:

Look at the HomeAdvisor vs. Thumbtack line. Same budget. HomeAdvisor delivered 44% more actual closures because of the combination of lead quality and my close rate on their leads. That's not a small difference. That's the difference between "this platform is working" and "this platform is working harder."

But here's what's critical: the ROI column tells a story too. Google Local Services looks incredible, but look at the close rate. I'm closing 12% of those vs. 18% on HomeAdvisor. Which one is actually better? That depends on what you optimize for. I optimized for sustainable revenue, so I shifted budget toward HomeAdvisor and Angi and scaled back Google.

The Calculator: Do This Right Now

You don't need fancy software to start. You need a spreadsheet or a note in your phone with these fields:

For each lead platform:

• Platform name
• Month/quarter
• Total dollars spent
• Total leads received
• Total leads converted (closed jobs)
• Total revenue from closed jobs

Once you have those five fields filled in for any platform over any 30-day period, you can calculate:

• Cost per lead: Spend ÷ Leads
• Close rate: Converted ÷ Received
• Revenue per lead spent: Total revenue ÷ Spend
• Cost per closed job: Spend ÷ Converted

I keep a running sheet for each quarter. Takes me 10 minutes to update on a Friday afternoon. That 10 minutes tells me more about my business than any gut feeling ever will.

Where Most Contractors Get This Wrong

I made these mistakes. You probably are too.

Mistake #1: Not attributing revenue correctly. A lead comes in from Thumbtack, but you close it a month later. Where does the revenue belong? The answer: wherever the lead came from. You need a system — even a simple one — that connects the job to its original source. I use Take the Leads' pipeline tracker now, but before that, I had a column in my calendar labeled "Lead Source." Basic, but it worked.

Mistake #2: Ignoring seasonal patterns. My HVAC business peaks in summer and winter. Plumbing steadies out year-round. If I only looked at January numbers, I'd think my HVAC leads were worthless (they have a 9% close rate in January because demand is low and competition is high). But if I look at June-August, they're my strongest platform at 22% close. Don't make quarterly decisions on monthly data.

Mistake #3: Not accounting for your time cost. Some platforms require more back-and-forth, more qualification, more follow-up. That's invisible cost that doesn't show up in your lead spend. Thumbtack, for example, requires active bidding on most leads. HomeAdvisor often pre-qualifies. If you're spending 30 minutes qualifying Thumbtack leads and 5 minutes on HomeAdvisor leads, Thumbtack's effective cost per lead is actually higher than the math shows. I weight this in my head now — if two platforms have similar ROI, I give preference to the one that wastes less of my time.

Mistake #4: Changing platforms too fast. A platform needs at least 30–60 days of data to tell you anything real. I ran Angi at a loss for 45 days thinking it was broken. Then it clicked, my referral network kicked in, and the close rate climbed to 16%. If I'd killed it after two weeks, I'd have missed a solid platform.

The Profitability Threshold

Here's the question that matters: What's the lowest cost-per-lead you'd accept?

That depends on your average job value and your close rate. But you can back into it.

Say your average job is $1,500. You want to make a 40% margin on that job (so $600 profit). You're comfortable with a 15% close rate.

Then your maximum acceptable cost per lead is: ($1,500 × 0.40) ÷ 0.15 = $4,000 per closed job is your break-even. Or $600 per lead if every lead closed. Since they don't, you'd work backward: if 15% close, then you can afford to spend $90 per lead before you hit break-even.

Most platforms won't be that cheap. You'd factor in that you want actual profit, not just to break even. So maybe your real threshold is $50 per lead. Any platform below that line stays in your rotation. Anything above? Test it, measure it for 60 days, and if it doesn't move, cut it.

Using Take the Leads to Automate This

I used to build this spreadsheet manually. Now I just pull the reports from Take the Leads' analytics dashboard — it does the tracking and calculation for me.

Every platform you're connected to shows:

• Leads received
• Leads closed
• Revenue attributed
• Cost per lead
• Your ROI on that platform

I check the dashboard every Friday. Takes two minutes. I can see immediately if a platform has gone sideways or if something's shifted in the market. Last month, I noticed my Google Local Services close rate dropped 3 points. That was enough to slow my budget there and test a new campaign structure on HomeAdvisor. Without the dashboard, I wouldn't have noticed for another month.

If you're tracking leads in any system, you should have visibility into what they're actually worth. If you're not tracking, start today.

The Action Plan

This is what I'd do if I were starting over:

Week 1: Pick one platform. Pull every number you can find — what you spent, what you got, what you closed. Do the math. Write it down.

Week 2: Do the same for your second platform. Compare.

Week 3: Set up a simple tracker (spreadsheet, Google Sheets, whatever) that you update every Friday.

Week 4: Review your metrics. Identify your strongest platform by cost-per-lead and close rate. Identify your weakest. Make a hypothesis about why and test it.

This isn't about being obsessive. It's about not being blind. You're already spending the money. You might as well know what it's buying.

I learned the hard way that gut feeling and brand reputation are terrible business strategies. Data isn't perfect either, but it's a lot better than instinct.

Start tracking. See what it shows you.

You might be surprised.