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Why cheap leads cost more per funded deal

Quick answer

Cost per lead and cost per funded deal move in opposite directions more often than brokers expect. A shared lead at a third of the price stops being cheap the moment it takes twice as many to fund one deal, and becomes the expensive option if it takes four times as many — which is the usual outcome once the same merchant is being called by five brokers.

Alex MakowskiFounder, Infinite BookingsUpdated 2026-08-302 min read

Every broker knows cost per funded deal is the real number and most still buy on cost per lead, because one is on the invoice and the other takes a quarter to measure. It is worth doing the arithmetic once, because the ranking flips.

Same $3,000, different lead types
Exclusive verified, 2 funded per 50$1,500cost per funded deal
Shared real-time, 2 funded per 150$1,500cost per funded deal
Shared real-time, 1 funded per 150$3,000cost per funded deal
Aged data, 1 funded per 1,500$3,000cost per funded deal

Cost per funded deal at $3,000 of spend. Shared leads only win where their funded rate holds up at volume, and the whole question is whether it does once four other brokers are dialling the same merchant.

Exclusive figure is client-reported. Shared and aged figures are illustrative.

What actually degrades on a cheap lead

  • Contact rate, because the number was never verified and may not be a working mobile.
  • Receptiveness, because you are the fourth broker to call about the same form.
  • Qualification, because a lead sold at $12 cannot afford to throw away the traffic that fails screening.
  • Rep morale, which is not a line item and shows up in dial counts within a fortnight.

When cheap is genuinely right

A floor with idle capacity, a rep-heavy cost structure and a disciplined follow-up process can make shared or aged data work, because their marginal cost of a dial is close to zero and volume is the constraint they can relieve cheaply. That is a real strategy and worth naming — cheap leads are the wrong buy for most brokers, not for all of them.

The wrong version is buying cheap because the invoice is smaller and then working the list exactly as you would have worked an expensive one. That combination gets the worst of both.

Questions brokers ask

Only if your funded rate on them holds up. Cost per lead and cost per funded deal frequently rank the options in opposite orders, and a lead at a third of the price is the expensive option if it takes four times as many to fund a deal.

Total spend on the batch divided by the number of deals that funded from it. Compare vendors on that figure at their typical outcome rather than their best one, and track it across orders rather than judging on a single batch.

Because the same merchant is being called by several brokers about the same form. By the third call they are irritated rather than interested, and the fourth broker is selling against three prior conversations they did not hear.

Yes, and it is usually the missing term. If a cheap batch needs four times the dials for the same conversations, the labour cost of the difference typically exceeds the saving on the invoice.

Yes — a floor with idle rep capacity and a disciplined follow-up process, where the marginal cost of a dial is near zero and volume is the binding constraint. What does not work is buying cheap and working it like an expensive list.

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