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A lead ROI calculator doesn't need special software. A spreadsheet with one row per lead source and a handful of formulas will tell you more than most marketing dashboards — as long as the inputs come from your real records and the math uses profit, not revenue.
Step 1: Set up the inputs
Create one row per lead source and one column for each input, for a defined period (a month or quarter):
| Input | Where it comes from |
|---|---|
| Spend | Invoices and ad platforms |
| Labor cost | Hours spent working the source × hourly cost |
| Leads (or appointments) received | CRM |
| Contacted | CRM |
| Booked | CRM |
| Sat | CRM or rep reports |
| Sold | CRM |
| Revenue sold | Signed contracts |
| Gross margin | Your job costing |
If you buy appointments rather than leads, leave the contact and booked columns blank for that row and start at appointments.
Step 2: Add the formulas
Write these as plain spreadsheet formulas, one column each:
- Total cost = spend + labor cost
- Cost per lead = total cost ÷ leads
- Cost per sit = total cost ÷ sat
- Cost per sale = total cost ÷ sold
- Close rate = sold ÷ sat
- Gross profit = revenue sold × gross margin
- Net return = gross profit − total cost
- ROI = net return ÷ total cost
- ROAS = revenue sold ÷ total cost
Step 3: Understand ROI vs. ROAS
ROAS (return on ad spend) compares revenue with cost. It's popular because it's easy and the numbers look big. But revenue isn't yours to keep — most of it pays for materials and labor.
ROI compares gross profit, after subtracting the cost, with the cost. It answers the real question: did this source make money?
Illustrative example: a source costs $5,000 and produces $40,000 in sold revenue. ROAS is 8 — impressive. At a 35% gross margin, gross profit is $14,000, net return is $9,000, and ROI is 180%. Still good, but a very different picture. A source with a ROAS of 3 at a 30% margin loses money.
Step 4: Handle timing
In-home sales close over weeks. If you calculate ROI at the end of the month for leads that arrived that month, recent sources look worse than they are. Two fixes:
- Cohort view: track each month's leads until they've had a full sales cycle, then calculate ROI for that cohort.
- Rolling view: use a trailing 90-day window for both costs and sales.
Step 5: Add a sensitivity row
Copy a source's row and change one input — close rate, show rate, or average job — to see how much ROI moves. It shows where improvement pays most. Usually it's close rate. Pair this with your break-even cost per lead so every source has a ceiling.
Reading the results honestly
- Compare sources on cost per sale and ROI, not cost per lead. The cost per appointment vs. cost per lead guide explains why.
- Include labor. Sources that need a lot of calling look cheaper than they are without it.
- Don't count referrals as free. Track the effort you put into earning them.
- Watch volume. A source with great ROI on three sales may not hold up at thirty.
Once the calculator works, fold the key outputs into a weekly sales KPI dashboard so you're watching trends, not snapshots.
Frequently asked questions
How do you calculate ROI on leads?
Subtract the total cost of a lead source, including labor, from the gross profit it produced, then divide by the total cost. Use gross profit rather than revenue so the result reflects money you actually keep.
What's the difference between ROI and ROAS?
ROAS divides revenue by cost. ROI divides net return — gross profit minus cost — by cost. ROAS can look healthy even when a source loses money; ROI shows whether it's profitable.
What is a good ROI for contractor leads?
Any positive ROI means the source covers its own cost from gross profit, but it also has to leave enough to cover overhead and profit. Compare sources against each other and against your targets.
How often should I update my ROI calculator?
Monthly for inputs, with ROI judged on cohorts or trailing 90-day windows so slow-closing sales are counted.
RunsForYou Team
Written by the team that runs outbound calling, homeowner qualification, and appointment booking for home service contractors at RunsForYou (Runs For You LLC).
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