In some cases, there are interim steps that occur prior to a sale being realized. For example, a customer may receive a direct mail piece that invites them to call for additional information. When they call, the company has the opportunity to convert the call into the sale, or they may take the information and forward it to a sales person. These are referred to as ‘leads’ or responses. They do not result in a sale, at least not yet. However, there is a cost associated with soliciting their response. That cost is described as a cost per lead or cost per response. It is calculated by taking all the costs associated with generating the lead, and dividing them by the number of responses or leads.

 It’s important to understand the CPL or CPR for a campaign, because they are not directly correlated with conversion rates. For example, one campaign may generate a $2.58/CPL, while another may generate a $4.50/CPL. However, the latter CPL may result in a far higher conversion than the previous CPL.