Most business owners can tell you last year's turnover to the nearest thousand. Far fewer can tell you what a single enquiry is worth, and that is the number that decides almost every practical marketing question. Is it worth answering the website at 10pm? Is a lead-capture tool paying for itself? Should the phone go to voicemail during lunch?
Without it, you end up judging tools by their price alone. A $20 subscription feels expensive or cheap depending on your mood, rather than on what it catches.
The value of a lead can be worked out with four figures you either already have or can find in an afternoon. Here is the method, with blanks for your numbers.
The four figures you need
Write these down before doing any arithmetic. Estimates are fine for a first pass, as long as you mark them as estimates and replace them later.
- Enquiries per month (E): every genuine enquiry from any channel, excluding spam and sales calls.
- Conversion rate (C): the share of those enquiries that became paying customers. If 12 of 60 enquiries became work, C is 12 ÷ 60 = 0.2.
- Average job value (V): what a typical first job or order is worth in revenue.
- Gross margin (M): the share of that revenue left after materials, subcontractors and direct costs. If a £1,000 job costs £600 to deliver, M is 0.4.
A fifth figure, repeat purchases, comes later. Leave it out for now.
The calculation, step by step
- Multiply average job value by gross margin to get profit per job: V × M.
- Multiply that by your conversion rate to get the value of one enquiry: V × M × C.
- Note that answer. This is your conservative value of a lead.
- Estimate how many further jobs a typical new customer gives you in the next two years. Call it R. If most customers buy once, R is 0. If they typically come back twice more, R is 2.
- Multiply profit per job by (1 + R), then by C, to get a fuller value: V × M × (1 + R) × C.
- Use the conservative figure for decisions and keep the fuller figure as a ceiling.
Filled in, it reads like this:
Each enquiry is worth: £____ (job value) × ____ (margin) × ____ (conversion rate) = £____ conservative. With repeat work: £____ × ____ × (1 + ____ repeat jobs) × ____ = £____ fuller estimate.
A worked example
Here is an illustration with invented numbers for a small landscaping business. Replace every one.
Say the business gets 50 enquiries a month and 10 become paid work, so C = 0.2. The average first job is £2,400. After materials, plant hire and a subcontractor, gross margin is 0.35, so profit per job is £840.
Conservative value of an enquiry: £840 × 0.2 = £168.
About half of new customers come back for maintenance or a second phase within two years, so on average R = 0.5. Fuller value: £840 × 1.5 × 0.2 = £252.
So each enquiry the business captures, rather than loses, is worth somewhere between £168 and £252 in gross profit. That changes how everything looks. Losing three evening enquiries a week is not a minor annoyance; on these numbers it is roughly £2,000 of gross profit a month walking away.
How much it varies by business
The same method produces very different answers across trades, which is exactly why a borrowed benchmark is useless. All figures below are hypothetical.
| Example business | Job value (V) | Margin (M) | Conversion (C) | Repeat jobs (R) | Conservative value | Fuller value |
|---|---|---|---|---|---|---|
| Dog groomer | £45 | 0.7 | 0.6 | 8 | £18.90 | £170.10 |
| Emergency plumber | £280 | 0.5 | 0.4 | 0.5 | £56 | £84 |
| Interior designer | £9,000 | 0.3 | 0.1 | 0.2 | £270 | £324 |
The groomer is the interesting row. A single first appointment looks almost worthless, but regular customers make each enquiry worth far more over time. This is where customer lifetime value matters most for a small business, and also where it is easiest to be optimistic. Base R on what your records show, not on the customers you like best.
Traps that inflate the number
A few mistakes make lead value look better than it is.
Using revenue instead of gross profit is the most common. A £5,000 job with £4,000 of materials is not worth £5,000 to you. Counting every message as an enquiry is the next: spam, job applicants and suppliers are not leads. And conversion rates calculated from your best month will flatter every tool you judge against them.
Also be careful about what a captured enquiry actually is. A name and email from someone asking about a service you do not offer is not worth the same as a qualified request with a budget and a date. The difference between a lead and a qualified lead is worth reading before you apply the number to every captured contact.
Lead value also drifts. Prices rise, margins shift when materials get dearer, and conversion rates change as you get better at quoting or as competition tightens. Redo the sums each year with the latest twelve months of records, and whenever you add or drop a major service.
Putting the number to work
With a lead value in hand, most spending decisions become simple division. A monthly cost divided by your conservative lead value tells you how many extra captured enquiries it needs to break even. On the landscaping example, a $59 plan needs well under one extra enquiry a month.
That is a break-even check, not a promise. Whether a tool actually captures those extra enquiries is something you measure after switching it on. What missed enquiries cost your business shows how to count what you are currently losing, and cost per lead from a website assistant covers tracking it afterwards.
Fill in the blanks today
Open last month's inbox and your invoices side by side. Count genuine enquiries, count how many became paid work, and pull the average invoice and your rough margin from your accounts. It takes an hour at most.
Then put those figures into the chatbot ROI calculator and keep the result somewhere you will see it. The next time you weigh up a tool, an advert or a late-night reply, you will be comparing its cost with a real number rather than a feeling.