What Is Pay-Per-Lead and How Does It Work? A Guide for Business Owners

The basic concept

Pay-per-lead (PPL) is a lead generation model where you pay a fixed price for each genuine customer enquiry you receive, rather than paying for advertising, clicks, or marketing campaigns. The lead generation company runs the marketing, finds the customers, and delivers the enquiries to you. You pay only when a real potential customer makes contact.

What does a lead look like?

A lead is typically a customer enquiry that includes contact details and a description of what the customer needs. For a trades business, this might be a homeowner who has described their plumbing problem and left their name and phone number. For a professional services firm, it might be a business owner who has requested a consultation. The quality of the lead depends on how it was generated and what qualification process was applied before delivery.

How is pay-per-lead different from Google Ads?

With Google Ads, you pay every time someone clicks your ad - whether or not they contact you. You might pay £5 per click, receive 100 clicks per month, and convert 10 of them into enquiries. Your cost per enquiry is then £50 (100 clicks x £5 / 10 enquiries). With pay-per-lead, you pay only for the 10 genuine enquiries. The lead generation company absorbs the cost and risk of the clicks that do not convert. This simplifies your costs and removes the complexity of managing advertising campaigns.

What does pay-per-lead cost?

The price per lead varies significantly by industry, geography, and job type. Trades leads (plumbing, roofing, electrical) typically cost between £20 and £60 per lead. Professional services leads (legal, financial, accounting) can cost £50 to £150+. The higher the value of the job or client relationship, the higher the lead cost tends to be. A useful way to evaluate whether the price is fair is to work backwards: if a roofing lead costs £35 and you convert one in four into a job worth £2,000, your cost per new customer is £140 on average - a very reasonable customer acquisition cost for a high-value service.

Are the leads exclusive?

This is one of the most important questions to ask any pay-per-lead provider. Exclusive leads are sold only to you. Shared leads are sold to multiple businesses - meaning you are competing with other contractors for the same customer the moment you receive the enquiry. Exclusive leads cost more but convert at a significantly higher rate. For most service businesses, exclusive leads are worth the premium.

Which types of business benefit most from pay-per-lead?

Pay-per-lead works best for businesses with high average job values, where the cost of acquisition is easily justified. Trades and construction businesses are the most common users, but it also works well for legal services, financial advice, estate agencies, and specialist professional services. It is less suited to very low-margin businesses where the cost per lead cannot be recovered from a typical transaction value.