The four numbers
Everything follows from figures you already have in your invoicing.
Average job value. Not your best job. The mean invoice across the last fifty jobs, including the small ones.
Gross margin. What is left after crew wages, tipping, traffic control, fuel and machinery on a typical job. This is the number marketing is paid out of.
Close rate on warm enquiries. Of the last thirty people who rang asking for a quote, how many became paying jobs. Use quoted-and-won, not everyone you spoke to.
Contact rate. Of the leads you receive, how many you actually reach. If you are hitting voicemail on a third of them, your effective close rate is far lower than you think, and that is your problem rather than the supplier's.
Putting them together
Multiply average job value by gross margin to get gross profit per job. Multiply that by your close rate to get gross profit per lead. Then decide what proportion of that you are willing to spend on marketing, and that is your maximum sensible cost per lead.
Work it in that order and the number is defensible. Work backwards from a supplier's price and you are just rationalising whatever they quoted.
Run your own figures through the lead value calculator once you have them.
The ceiling is not the target
Your maximum is the point at which a lead stops being worth buying. Paying right at it means the campaign breaks even and you have worked for nothing. Sensible operators buy well under the ceiling and treat the gap as their actual profit on marketed work.
The ceiling is most useful as a negotiating position. When a supplier quotes you a price per lead, you can say precisely why it does or does not work against your job economics, which is a far stronger conversation than haggling.
What quietly moves the number
Speed to contact. The same lead converts dramatically differently depending on whether you ring back in three minutes or three hours. This is the cheapest improvement available to most tree businesses, and an AI receptionist fixes the after-hours half of it for a fixed monthly cost.
Exclusivity. A shared lead competing against three other quotes converts far below an exclusive one, so the two are not comparable at face value. The full argument is in buying tree service leads.
Job type mix. Removal leads and pruning leads have different values. Blending them hides which part of your marketing is working.
Repeat and referral value. A tree customer with a large block often comes back, and tells neighbours. If you can measure that tail honestly, it raises your ceiling. If you cannot measure it, leave it out rather than using it to justify a price you cannot otherwise afford.
Then check it against reality
Once you have bought leads for a quarter, compare your modelled cost per job against the actual figure from your invoices. If they diverge, the usual culprits are an optimistic close rate or an unmeasured contact rate.
If the numbers say paid leads do not work for your business, believe them — see when not to buy tree service leads, then look at the free channels in how to get tree removal leads. If they do work, our figures are on the pricing page and the terms are on the lead generation page.
Frequently asked questions
What close rate should a tree business expect on inbound leads?
It varies widely with speed to contact and lead exclusivity, so use your own figure rather than an industry average. Track thirty enquiries properly — answered, quoted, won — and you will have a real number. If you have never measured it, measure it before you buy leads, because the whole calculation rests on it.
Should I use revenue or gross profit in the calculation?
Gross profit. Revenue per lead flatters the figure badly, because a large removal carries traffic control, tipping fees, machinery and a crew for a day. Marketing has to come out of what is left after the job is delivered, so run the numbers on margin and the ceiling you get will be one you can actually live with.
Does the same maximum apply to every job type?
No, and treating them the same is a common mistake. A removal lead and a hedge trimming lead have very different values, so a blended cap can have you overpaying for small work and underbidding on the jobs you want. If your supplier can segment by job type, set separate ceilings.
How much of my gross profit should go to marketing?
That is a business decision rather than a formula, and it depends on whether you are growing, holding or protecting cash. What matters is that you choose the proportion deliberately and then hold every channel to it, rather than discovering after the fact that a campaign consumed most of the margin on the work it produced.