Lesson 3: Cost per cold email lead for a minimal setup
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In this lesson, you’ll learn how to run a minimal cold email setup and calculate your cost per lead.
For just $56/month, you can reach 500 prospects and generate leads at around $28 each, or even as low as $8 with higher-performing campaigns. You’ll see real examples and understand how factors like reply rate and positive response rate impact your ROI.
If you’re looking to start lean and scale smart, this lesson gives you the foundation. Next up: scaling to 10,000 prospects!
In this lesson you’ll learn:
- How a basic cold email setup reaching 500 prospects per month costs as little as $56 all-in, covering your sequencer, prospect emails, mailbox and domain
- Why even a conservative 3% reply rate on that setup brings your cost per lead down to around $28 – for a lead who already knows your offer, not just a passive ad click
- How top-performing campaigns with 13% reply rates and 11% positive response rates can bring that cost per lead as low as $8 – comparable to what other channels charge per click
- That cost per lead improves significantly as you scale volume, setting up the case for what a 10,000-prospect setup can deliver
In this lesson I will show you a minimal setup for cold email.
I will then go through some example campaigns and calculate the cost per lead.
The minimal setup to run outbound in Woodpecker:
- contacting 500 prospects = $29 per month
- finding 500 prospect emails = $27 – but you get 100 free every month so actually it’s about $21
Then we need mailboxes and domains. You can get that in Woodpecker too:
- Let’s assume a domain costs you about $2 a month – billed annually of course
- $4 for an email account
Okay, once we pull it all together we get to about $56.
$56 to reach 500 prospects every month.
Now, when it comes to reply rates, those will vary depending on:
- offer
- target
- country
- copy
- deliverability
- and many more things
For our campaigns we assume a 3% reply rate – taking into account all the follow-ups.
500 prospects times 3% reply rate = 15 replies.
Our data shows that: 80% of our campaigns see a 10%-20% positive response rate.
15 replies would then give you about 2 leads (rounded down).
Remember, we paid $56. Now we just divide this cost by the 2 leads.
We arrive at a $28 cost per lead.
One important thing I mentioned in my previous lesson the definition of a lead in cold email:
- lead = someone that replied positively to your value proposition
So, $28 for a lead that knows what you offer is great.
It’s also much closer to a deal than someone that may just click your ad.
Now if you follow my course I don’t want to get you to be just average.
I want to teach you how to get to the top:
- 20%
- 10%
- or even the top 5%.
Previously I showed you campaigns from our customers.
One of these examples was this campaign
- 13% reply rate
- about 11% positive response rate
Let’s redo our cost per lead calculation with this campaign.
- 500 prospects
- 13% reply rate
- 11% positive rate
= about 7 leads.
As usual in this example we paid $56 to contact those 500 leads
Dividing the cost by 7 leads brings us to a $8 cost per lead
This is the price you may pay just for clicks or a thousand impressions in a different channel.
Yet in the cold email space this could be your price per lead…
just as it is for one of our customers.
So to wrap things up…
The example setup I showed you was a minimal one.
The price per lead and your ROI gets even better the higher your budget and outreach volume is.
So, join me in my next lesson where we do just that.
I will show you the cost per lead and ROI for a 10k prospects setup.
See you in the next lesson!