Lead Conversion Calculator

Lead cost is meaningless without conversion. A $12 lead that converts at 2% costs $600 per policy; a $40 lead that converts at 15% costs $267. Agencies routinely optimise the first number and ignore the second.

This calculator runs the funnel stage by stage - contact, quote, close - and reports the cost of acquiring one customer alongside the first-year commission that acquisition produces.

Result

Policies written

29

Cost per policy written

$193.10

Contacts made: 220
Quotes delivered: 132
Overall conversion: 7.25%
Leads per policy: 13.8
Premium written: $40,020
First-year commission: $4,802
Lead spend: $5,600
First-year return: -$798

Every conversion rate is one you supply. Pull them from your agency management system for a result you can act on.

Compare cost per acquisition with first-year commission, then again with the renewal stream - many lines only become profitable in year two.

Funnel

Stage	Count	Conversion from previous
Leads	400	100%
Contacted	220	55%
Quoted	132	60%
Policies written	29	22%

How to use the lead conversion calculator

Enter the number of leads in the period and what each one cost.
Enter the percentage you make contact with, quote, and then close.
Enter the average premium and your commission rate.
Compare cost per acquisition against first-year commission, then against the renewal stream.

What people use this for

Deciding whether a lead source is profitable.
Finding which stage of the funnel is costing the most.
Setting a maximum sensible price per lead.
Comparing purchased leads against referral or organic sources.

Worked examples

Every figure below is produced by running this calculator against the example inputs, so the numbers always match the tool.

A typical purchased-lead funnel

400 leads at $14 each, 55% contacted, 60% quoted, 22% closed, $1,380 average premium at 12% commission.

Policies written: 29
Cost per policy written: $193.10
First-year return: -$798

Better contact rate, same spend

The same leads with contact improved from 55% to 75%.

Policies written: 39.6
Cost per policy written: $141.41
Overall conversion: 9.9%

Contact rate is usually the cheapest thing to fix

Every stage multiplies. Improving contact from 55% to 75% raises overall conversion by more than a third without changing the quote or close rates at all - and contact rate is largely a function of speed and persistence rather than skill.

It is also the stage most agencies measure least. Quote and close rates get attention because they feel like selling; contact rate looks like admin and is worth more.

First year is not the whole return

Many lead sources look unprofitable in year one and are clearly profitable across the life of the policy, because renewal commission arrives every year with no further acquisition cost.

Compare the cost per acquisition against first-year commission, and then against the renewal stream at your retention rate. A source that breaks even in year one and retains well is a good source.

Methodology and assumptions

What this calculator does, and what it deliberately does not do.

Each stage multiplies the previous: leads × contact rate × quote rate × close rate.
Cost per acquisition divides total lead spend by policies written. First-year return subtracts spend from first-year commission.
Every rate is one you supply. Use figures from your own management system rather than the defaults.
All figures are estimates produced from the values you enter. This site has no rate feed and no carrier data, so it cannot quote or price a policy.
Nothing you type is transmitted or stored - the calculation runs entirely inside your browser.

This calculator provides an estimate based on the information you enter. Actual insurance premiums, coverage, eligibility and pricing vary by provider and individual circumstances.

This website is not an insurance company, an insurance agency or a licensed broker. It does not sell insurance, does not provide insurance quotes, and is not authorised to give advice about which policy you should buy.

No result produced here is an offer of insurance or a guarantee of coverage. Only a licensed insurer or agent, working from your verified details, can quote or bind a policy.

Frequently asked questions

What conversion rate should I expect?

It varies by line, lead type and market to the point where an industry average is not useful. Measure your own and improve against it.

Should I include my own time as a cost?

For a full picture, yes. Add it to the cost per lead as a loaded hourly rate divided across the leads worked.

Why is cost per acquisition so much higher than cost per lead?

Because most leads do not become policies. That multiple is the whole point of measuring the funnel rather than the lead price.

Does this include renewal income?

No. It measures acquisition against first-year commission. Use the agency revenue calculator to model what the retained policy is worth over time.

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