Cost per funded deal: the method brokers should use to judge any lead source
Cost per lead tells you what you paid. Cost per funded deal tells you whether the source made money, and it is the only figure that puts a cheap shared list and an exclusive, verified enquiry on the same scale.
Cost per funded deal is what you spent on a lead source over a period, divided by the deals from that source that settled. That is the whole formula. The work is in the inputs: knowing which settlements came from which source, and waiting long enough for them to land.
Judging a source on price per lead measures the top of the funnel and ignores everything beneath it. The lead with the smallest price tag can produce the dearest settlement, because an unreachable number and an enquiry already shopped around cost the same to buy and return nothing.
Lead spend for the period
Every dollar paid to the source in the window you are measuring, including any platform or setup charge. Use at least a full month.
Leads delivered
Enquiries actually received from that source in the same window, before any filtering of your own.
Contact rate
Leads where you reached a person and had a conversation, divided by leads delivered. Verification and speed to first call both show up here.
Conversation-to-application rate
Conversations that became a lodged application. Craft and panel fit live here, and so does exclusivity: an enquiry already shopped around lodges less often.
Application-to-settlement rate
Lodged applications that settled. Lender appetite, the accuracy of the lead data and the enquirer's stated timeframe sit here.
Follow-up hours
Time spent dialling, texting and chasing that source's leads. Outside the headline formula, but the cost that cheap leads quietly inflate.
Run it on each source separately, with one window and one set of definitions; mixing sources hides the difference you are looking for.
- Tag every lead with its source on arrival. If your CRM cannot say where a settled deal originated, nothing below can be calculated.
- Choose a window long enough for settlements to land. Measure spend over the month the leads arrived and count the settlements those leads produce whenever they close.
- Record raw counts, not just rates. Leads delivered, people reached, applications lodged, deals settled, dollars spent, hours worked.
- Divide spend by settlements, then hours by settlements. The first is cost per funded deal; the second separates sources with the same headline cost but different dialling. Zero settlements after a fair window is an answer in itself.
- Set the result against revenue per settlement. Upfront commission on the typical deal from that source, with trail on a separate line. A source earns its place when that revenue clears cost per funded deal and the hours behind it.
- Re-run it monthly, one variable at a time. Change provider and follow-up cadence in the same month and you will not know which moved the number.
The general case is in exclusive vs shared leads; your own funnel counts settle it for your book.
Every figure here is invented to show the arithmetic; none is a quote, a published figure or any broker's actual result.
Source A, hypothetical: you spend $4,300 in a month on 40 exclusive leads. You reach seven in ten: 28 conversations. One in four lodges: 7 applications. Four settle. Cost per funded deal is $4,300 divided by 4, or $1,075. Around 25 hours of follow-up: roughly 6 hours per settlement.
Source B, hypothetical: the same $4,300 buys 120 shared leads. You reach three in ten: 36 conversations. Most have already spoken to other brokers, so one in six lodges: 6 applications. Three settle. Cost per funded deal is $4,300 divided by 3, about $1,433. Around 66 hours of follow-up: 22 hours per settlement.
On price per lead, Source B costs a third of Source A. On cost per funded deal it is a third dearer, and on hours per settlement more than three times worse, with 80 extra numbers to dial each month. The method shows what the discount actually bought.
- Judging too early. Settlements counted a few weeks after commercial enquiries arrived look poor and keep improving for months. Set the window by the product's settlement timeline, not your patience.
- Counting applications as wins. Cost per lodged application is a useful interim read, but lenders decline, valuations fall short and enquirers change their minds. Only settlements pay you.
- Blaming the source for slow follow-up. Call a verified enquiry a day late and the source takes the blame for your diary. Fix time to first call before judging any provider; the playbook is in how to convert finance leads.
- Trusting a tiny sample. A handful of leads and a single settlement is an anecdote, not a rate.
- Ignoring contact rate as a diagnostic. When the number is poor, contact rate says whether the problem is dead numbers or your dialling. Unverified leads fail here first; see verified vs unverified leads.
We publish one performance number, a contact rate of 72.5%, because it is the first gate in this method. Every lead is exclusive, sold once and never resold, SMS-verified before delivery, and arrives with loan amount, purpose and timeframe; on business loan enquiries the average amount is about $149,000. Pricing is pay per lead, quoted on a call by niche and volume, with no lock-in contracts and no setup fees, so you can run this method on a real month of business loan leads. The pricing logic is in what finance leads cost.