Home Service Marketing Benchmarks: What Should You Actually Be Paying Per Lead?

You’re spending money on marketing. But are you getting a good deal… or getting taken?

That’s the question every home service business owner asks at some point. And it’s almost impossible to answer without benchmarks. Proper attribution in home service marketing goes beyond lead counts to reveal what you’re actually paying for results.

Why cost per lead lies to you

Let’s say you have two lead sources.

Source A gives you 100 leads at $50 each. Source B gives you 50 leads at $100 each. You spent $5,000 on both.

Most contractors would say Source A is the winner because you got twice the leads for the same money.

But here’s what actually happened. Source A had an 8% close rate, so those 100 leads turned into 8 jobs at a cost per sale of $625. Source B had a 25% close rate, so those 50 leads turned into 12 jobs at a cost per sale of $417.

Source B generated more jobs at a lower cost per acquisition. The “expensive” leads were actually cheaper when you followed them through to the sale.

This is why you have to track all the way to revenue. Cost per lead is just the starting point.

Learn more about tracking marketing attribution through to closed jobs.

What the benchmarks actually look like

Based on recent industry data, here’s what contractors are paying on Google Ads.

Pools, spas, and cleaning services run the lowest at around $45-50 per lead. These tend to be simpler decisions with shorter sales cycles.

HVAC and plumbing sit in the middle, typically $100-250 per lead depending on whether you’re talking about emergency service calls or full system installations. Emergency keywords are expensive but the leads close faster because the homeowner needs help now.

Roofing is the most expensive at $200-350 per lead or higher. Windows, doors, general contractors, and remodeling are all on the higher end too. These are big decisions that take months to close.

If you’re in a competitive metro area like Dallas, Atlanta, Houston, or Phoenix, expect to pay 2-4x these national averages. The same keywords that cost $50 in a smaller market might cost $150 in a major metro.

Conversion rate tells the real story

Your conversion rate is what percentage of leads become paying customers, and it varies dramatically by trade.

Plumbing and pest control tend to convert highest at 12-15% because the problems are urgent and the sales cycles are short. When someone’s toilet is overflowing, they’re not shopping around for three weeks.

HVAC service calls convert around 10-15%, but HVAC installations drop to 5-10% because the customer is making a bigger decision and probably getting multiple quotes.

Roofing and remodeling are the hardest to close at 3-7%. You’re looking at 60-180 day sales cycles with lots of competition.

The industry average across all home services is around 7.8%. If you’re consistently below 15% on any lead source, that’s usually a sign of either poor lead quality, slow response time, or problems in your sales process.

Here’s an interesting benchmark though. If you’re closing above 50%, you might actually be underpriced. The most profitable contractors we see operate in the 25-40% range because they’re charging what they’re worth and still winning a healthy share of jobs.

What’s a good cost per acquisition?

The general rule of thumb for home services is to keep your cost per acquisition under 10-15% of your average job value.

So if your average ticket is $5,000, you can afford to pay $500-750 to acquire that customer. If your average ticket is only $500, you need to keep acquisition cost around $50-75 to make the math work.

This calculation gets more interesting when you factor in repeat business. If you have strong retention through maintenance agreements, repeat service calls, and referrals, you can afford to pay more upfront because that customer is worth more over time. A first-time customer who becomes a 10-year maintenance agreement holder is worth far more than their first invoice suggests.

Learn more about how customer lifetime value changes this calculation significantly.

The metric most contractors ignore

Most contractors track cost per lead because it’s the easiest number to get. Your ad platform tells you how much you spent and how many form fills you got.

But the businesses that grow track the full funnel from lead to appointment to estimate to closed job to revenue. When you have this data, you can calculate not just cost per lead but cost per appointment, cost per sale, and return on ad spend.

More importantly, you can pinpoint exactly where leads are falling out. If you have a high cost per lead but a great close rate, your leads are quality and you probably just need more volume. If you have a low cost per lead but a terrible close rate, you’re paying for garbage or your sales process needs work.

Monthly review framework

Every month, you should be asking yourself a few key questions:

• What was my cost per lead by source?
• What was my cost per sale by source?
• Which source had the best close rate?
• Which source generated the most revenue?
• Am I under 15% cost per acquisition on average?

Keep a simple spreadsheet and track these numbers monthly. Compare quarter over quarter and you’ll start seeing patterns that help you make better decisions about where to spend.

The contractors who win aren’t the ones who spend the most on marketing. They’re the ones who know exactly what they’re getting for every dollar spent.

Where to go next

Response time is the hidden killer of good leads, and the 5-minute rule explains why. If you’re getting leads but not jobs, read why your leads aren’t converting. And to understand how much you can really afford to spend on acquisition, dig into customer lifetime value.