Your CPL is Lying to You
Written by Hoome Admin
There is a common tension inside most high-volume building companies.
The Marketing Director presents a monthly report showing green arrows: lead volume is up, and Cost Per Lead (CPL) is down. In the boardroom, this looks like success. Yet, the Sales Director is frustrated. They argue that the leads are low quality – “tyre kickers” with no intent or capacity to build.
Both parties are technically correct. Marketing is hitting its KPI, but Sales is missing its target.
The problem isn’t your sales team, and it isn’t your creative. The problem is what you are asking the algorithm to do.
The Algorithm Optimises for What You Measure
Digital advertising platforms like Google and Meta are incredibly efficient at giving you exactly what you ask for. If you tell the algorithm to get you the maximum number of form fills for the lowest possible cost, it will find people who are very good at filling out forms, but not necessarily good at buying homes.
In the volume building sector, a “cheap” lead is often an expensive distraction. It consumes sales time without contributing to the bottom line.
Offline Conversion Tracking
To fix this, we must close the data loop. This process is called Offline Conversion Tracking (OCT).
Instead of optimising for the initial enquiry, we must feed the data from your sales CRM (contracts signed, deposits paid) back into the advertising platforms. This tells Google and Meta: “Ignore the 50 people who enquired but didn’t qualify. Go find more people like the 3 who actually signed a contract.”
By training the machine on revenue rather than volume, the algorithm stops hunting for “leads” and starts hunting for “buyers.”
From CPL to Cost Per Contract
The strategic shift required here is to move your primary metric from Cost Per Lead (CPL) to Cost Per Contract (or CPA).
While CPL is a useful early indicator, it is a vanity metric in isolation. A campaign with a $50 CPL that converts at 1% is significantly more expensive to your business than a campaign with a $150 CPL that converts at 10%.
The Hoome Perspective
We view metrics through the lens of the complete journey. CPL remains a vital pulse check for top-of-funnel engagement and market reach – it tells us if we are capturing attention efficiently.
But for business growth, it cannot stand alone. Our approach involves setting up the technical infrastructure – connecting your CRM to your marketing channels – to track the full lifecycle. This ensures you have visibility on cost efficiency at the start of the journey, and revenue effectiveness at the end.
