What is the difference between pay-per-lead and pay-per-click?
Pay-per-click charges for traffic and leaves conversion to your page. Pay-per-lead charges for a contact, which sounds safer until you ask how many other contractors received the same one. Compare both on cost per booked job: a shared lead at $60 closing one in eight costs $480 a job, and clicks converting well can cost far less.
What each buys
Pay per click. You pay for a visit. Whether it becomes an enquiry depends on your landing page, your phone number and how fast you answer. Cheaper per event, and the conversion risk is yours.
Pay per lead. You pay for a contact — a form submission or a call. The provider carries the cost of traffic that goes nowhere, and prices for it. The risk shifts, and so does the price.
The question that decides the value
How many other contractors received the same lead?
An exclusive lead at $80 and a shared lead at $80 are completely different products. Shared leads mean you are competing on speed with three or four others, and your close rate collapses accordingly.
Run the arithmetic:
- Lead at $60, closing one in three → $180 per booked job
- Same lead shared four ways, closing one in eight → $480 per booked job
The invoice looks identical. The cost per job is nearly three times higher.
Do your own ceiling first
Before agreeing any price, calculate what an enquiry is worth: average job value, times margin, times close rate. A $600 job at 45% margin closing one in four is worth about $67 in gross profit per enquiry.
That number is your ceiling and it should govern every decision. No published industry average is worth using, because averages blend businesses nothing like yours.
What to check in a pay-per-lead agreement
- What counts as a billable lead, precisely
- Whether leads are exclusive or shared, and with how many
- How repeat contacts from the same person are billed
- The dispute process and the window for raising one
- Whether you can pause during a busy period
Those clauses determine the real price. They are also far harder to negotiate after signing.
Where pay per click wins
A Houston business with a fast landing page, published prices and someone answering the phone converts well enough that paying a premium to transfer conversion risk is poor value. You would be paying for a problem you have already solved.
Where pay per lead wins
A business without a decent site, without the capacity to build one soon, or entering a new service where it has no presence. It buys time, and time has value.
The alternative worth pricing against
Set the same monthly figure against building your own channel. Growth Engine at $5,500 setup and $1,500 a month buys service pages, local SEO structure and an enquiry flow that keeps producing after you stop paying — which purchased leads never do.
The honest read
Bought leads are a reasonable purchase for a while. If you are still buying them in three years, the ratio never moved and the business is renting its entire customer supply.
Frequently asked questions
What is the difference?
Pay per click charges for a visit and leaves conversion to your page. Pay per lead charges for a contact, so the provider absorbs traffic that goes nowhere and prices for that transferred risk.
What decides whether a lead price is good?
How many other contractors received the same enquiry. A lead at $60 closing one in three costs $180 a job; the same lead shared four ways closing one in eight costs $480. The invoice looks identical.
How do I set my ceiling?
Average job value times margin times close rate. A $600 job at 45% margin closing one in four is worth about $67 per enquiry. No published industry average is worth using, because averages blend businesses nothing like yours.
What should I check before signing?
What counts as a billable lead, whether leads are exclusive or shared and with how many, how repeat contacts are billed, the dispute process and window, and whether you can pause during busy periods.
When is pay per click the better buy?
When you have a fast landing page, published prices and someone answering the phone. You already manage the conversion risk, so paying a premium to transfer it is poor value.