Cost Per Lead: Take It Back, Hubspot

Check out the following chart, and see if you can answer this question: Why would the cost per lead for large companies be more than double than that for all firms with less than $500 million in revenue?

Shouldn’t a larger company have more brand recognition, more efficient marketing processes, and be acquiring far more leads-per-dollar spent than smaller, lesser-known, more inefficient companies? What am I missing here?

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These Numbers Just Ain’t Right

The $272 per lead number in financial services is simply not possible. Here’s the logic:

  1. Across the 6,000 credit unions in the US, the average asset size is about $1.2 billion, and the average number of members is about 103, 000. (Yes, I understand that the standard deviation on that average is huge.)
  2. Let’s say the average credit union adds 10,000 members in 2017. That’s a 9.8% growth rate. Not unreasonable at all.
  3. If the average credit union had a lead conversion rate of 50%, that would mean it generated 20,000 leads. Maybe there are credit unions out there converting 50% of leads, I don’t know. Personally, I think that number is astronomically high. If you disagree, please let me know… I’m all ears.
  4. At $272 per lead, HubSpot says this “average credit union” spent $5.4 million on lead generation.
  5. On average, banks and credit unions spend about 0.1% of assets on marketing. For our average credit union, that works out to a marketing budget of $1.2 million.

Based on these assumptions, if Hubspot’s cost per lead was right, the average credit union is spending 4.5 times its total marketing budget to generate leads. Folks, even if that credit union was converting 100% of its leads, it would still be spending twice the average budget on lead generation.

The cost per lead numbers from Hubspot simply aren’t right. I say, “Take ’em back, Hubspot!”

Ron ShevlinRon Shevlin is Director of Research at Cornerstone Advisors. Check out more of his ideas and research on Cornerstone's Insight Vault. And don't forget to follow him on Twitter at @rshevlin.

This article was originally published on August 21, 2017. All content © 2018 by The Financial Brand and may not be reproduced by any means without permission.


  1. CPL really depends on a multitude of factors. Is this a MQL or SQL? Was this lead generated from an active campaign or passive lead generation source?

    And while cost per MQL and SQL is important, we’ve actually helped clients use marketing automation platforms like HubSpot to close the loop and gain insight into product pipeline revenue and the cost of acquisition for specific digital marketing campaigns.

    At a minimum, we are recommended banks and credit unions to shift their thinking from one-and-done marketing campaigns to producing full-funnel campaigns with ever green content that add value over time to the bottom line.

  2. Some additional thoughts/questions… are these 10,000 new members brand new accounts? That averages out to 833 new accounts per month. Or does this include repurchases for loans, refis, etc by current members?

    Let’s assume the average cost to acquire a new account is $350 ( At 10,000 new accounts per year, you’re looking at needing to spend $3,500,000 or 3.5X the marketing budget.

    Which begs the question, are you accounting for marketing budgets alone or do operational expenses like staffing and technology get included in CPL/CPA?

    Let’s keep with your example and assume a credit union with a marketing budget of $1 million spends $350,000 (35%) on digital marketing. At an average CPL of $272, they would generate 1,287 leads over the course of a year or 107 leads per month.

    We’ve had the opportunity to look under the hoods of many credit union website and digital strategies and no one is seeing a 50% conversion rate. They are doing great with 20%-25% conversion.

    The problem for many banks and credit unions is their conversion points are focused on bottom-of-funnel and missing an opportunity for top of funnel leads.

    The solution is simple, increase top-of-funnel conversion opportunities and you will decrease total CPL.

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