What is a good cost per lead for a service business?

Cost per lead (CPL) is the number owners ask about first. It is also the number that misleads them most often. This guide gives the published benchmarks, says exactly where each one comes from, and then shows the metric that decides whether a channel makes you money: cost per booked job.

The most cited public benchmark is the annual search advertising report from LocaliQ and WordStream, which are owned by the same company. The 2026 edition puts the average cost per lead across industries at $66.69¹. WordStream says it looked at more than 13,000 search campaigns in 23 industries on Google Ads and Microsoft Ads, run between April 2025 and March 2026². It defines a lead as a click that turns into a call, chat, form fill or email¹.

The same report found that the overall average CPL fell for the first time in five years². The 2025 edition, built on more than 16,000 campaigns from April 2024 to March 2025, put the average at $70.11³.

Two cautions before you use any of these numbers:

• These are a vendor’s own customer accounts. They are not a random sample of all advertisers, and LocaliQ sells ad management. Treat them as directional.
• Some figures repeat. In the published tables, home improvement and legal CPLs are identical in the 2025 and 2026 editions, and the 2025 home services report lists plumbing and heating at the same CPL¹³⁴. That may be real or may be a reporting artifact. Either way, do not plan a budget on the second decimal.

The table below pulls the categories most relevant to local service businesses. Each row is a search advertising CPL (Google Ads and Microsoft Ads), not a marketplace or Local Services Ads price.

Legal is the most expensive category in the 2026 table, at $131.63 per lead¹. Physicians and surgeons dropped 29.54% year over year, one of the largest declines in the report².

“Home services” hides a wide spread. LocaliQ’s separate home services report, based on 3,211 US search campaigns run between April 1, 2024 and March 21, 2025, breaks it out by trade⁴. LocaliQ notes that the “averages” in that report are technically medians, to limit the effect of outliers⁴.

Google Local Services Ads (LSA) charge per lead instead of per click, so their CPLs are not directly comparable. Google does not publish average lead prices. It says prices vary by location, job type, lead type and bidding mode, and that message leads are usually priced lower than phone leads⁹. The best public sample is from SearchLight, a vendor that sells tracking software to contractors. It tracked $6.72 million of LSA spend across 888 contractors and 126,650 leads in February 2026⁵.

SearchLight reports spend before Google’s lead credits, so net CPLs would be somewhat lower⁵.

Angi, Thumbtack and similar marketplaces do not publish price lists. Angi says lead fees change with the task, the homeowner’s location and demand⁷. Thumbtack says it tries to match the cost to how valuable the job is, and pros set their own lead prices⁸.

Public filings give one rough reference point. Angi reported $587.1 million of US lead revenue and 20.2 million leads in 2025⁶. Dividing one by the other gives about $29 of lead revenue per lead ($587.05 million ÷ 20.195 million = $29.07). Treat that as a blended average across hundreds of task types, from gutter cleaning to remodels, not as a price you will be quoted.

The bigger difference is who else gets the customer. Angi matches each project request with no more than five pros⁷. Thumbtack lets a customer contact up to five pros in the first four hours of a search, and more after that¹⁴. A $29 lead that four other companies also call is a different product from a $53 lead that only rings your phone.

No. Keyword tools show what it costs to win a click, not a lead. An analysis of Google Keyword Planner data from September 2025 to August 2026 puts the median high-range top-of-page bid estimate across plumbing terms at $28.97, with “emergency plumber near me” near $102¹¹. For law firm terms the median is $40.00, and the 90th percentile is $433.50¹¹. These are Google’s bid estimates for the top of the page, not prices paid per lead.

To turn a click price into a rough CPL, divide it by your conversion rate. LocaliQ’s 2026 data shows an average CPC of $8.33 and an average conversion rate of 8.05% for home and home improvement¹:

• Average click: $8.33 ÷ 0.0805 = about $103 per lead.
• Top-of-page plumbing click at the median bid estimate: $28.97 ÷ 0.0805 = about $360 per lead.

The gap shows why emergency keywords can produce leads that cost several times the industry average, and why they can still be worth it if those jobs pay well.

A lead is a phone call or a form, not a customer. What you can afford depends on how many leads turn into paid jobs and what each job earns. SearchLight’s January 2026 Google Ads sample of 816 contractors shows the trap clearly⁵:

Branded search looks cheap because many of those searchers already know you. Non-branded search costs more per lead but is where new customers come from. Neither number tells you whether to spend more until you know the cost per paying customer and the profit per job.

Rules of thumb do not replace your own numbers. Many operators track three things per source, every month: leads, booked jobs and revenue. With those, the comparison is simple.

Worked example: cheap leads versus booked jobs

Two lead sources for a plumbing company. The inputs are illustrative.

Source A has the lower CPL. Source B produces 50% more jobs for the same money ($2,000 ÷ 6 = $333 versus $2,000 ÷ 9 = $222). Many operators see lower lead-to-job rates on shared leads, because several companies race to call the same person.

To find the most you can pay per lead, see what a lead is worth.

Yes, and they change which pricing models are safe.

• Lawyers. The ABA Model Rules comment says a lawyer may pay for lead generation as long as the lead generator does not recommend the lawyer, the payment is consistent with the fee-sharing and professional independence rules, and its communications are not misleading. The lead generator also must not imply it is referring without payment or that it analyzed the person’s legal problem¹². States adopt their own versions of these rules, so check with your state bar.
• Health practices. The federal Anti-Kickback Statute makes it a felony to knowingly and willfully pay anyone to induce referrals for services paid by a federal health care program¹³. Paying a vendor per patient or per referral can run into this and into state laws. Flat-fee advertising is the common safer structure. Talk to a healthcare attorney before you sign any per-lead or per-patient deal.

1. Pick the right comparison. Compare search ads to search ad benchmarks, LSA to LSA, and marketplace leads to your own marketplace history.
2. Measure 90 days, not 9. A few big jobs or a slow month will swing CPL by 50% or more in a small account.
3. Watch the trend in prices. Yelp reported that across all advertisers its average cost per click rose 10% in 2025 while ad clicks fell 7%, and that for its Services businesses average cost per click rose 9% while ad clicks fell 3%¹⁰. Fewer clicks at higher prices means each lead costs more.
4. Judge channels by cost per paid job and profit per job. CPL is an input to that number, not a replacement for it.

• Published averages: about $67 per search lead across industries, about $91 for home services, about $132 for legal, and about $53 for home-service LSA leads in one vendor sample¹⁵.
• Trade matters more than industry. Roofing search leads averaged $228.15 while cleaning averaged $46.99⁴.
• Every benchmark here comes from a vendor’s own client accounts. Use it as a range, not a target.
• A low CPL on shared or branded leads can still mean a high cost per paid job. Track leads, booked jobs and revenue by source.
• Law firms and health practices should check referral-fee rules before choosing a per-lead vendor.