Lesson 5: Reaching 10.000 prospects a month with cold email, setup, cost per lead and ROI (PART 2)

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In this lesson, you’ll learn how to calculate cost per lead, cost per deal, and ROI for a cold email campaign targeting 10,000 prospects.

We walk through three real-world performance scenarios, from average to exceptional, and show how ROI can reach up to $123 per $1 spent.

You’ll discover how campaign performance and deal size dramatically impact profitability, making cold email one of the most cost-effective lead generation channels.

In this lesson you’ll learn:

• How three performance tiers – from a conservative 3% reply rate to a strong 30% – produce wildly different outcomes from the same $823 monthly spend, ranging from 30 to 510 leads
• Why cost per deal can drop as low as $17 in high-performing campaigns, and how a 10% lead-to-deal conversion rate makes that math realistic rather than optimistic
• How ROI scales from 629% in the most conservative scenario to over 12,000% in the best case – with the mid-tier scenario producing a $33 return per $1 spent, closely matching Litmus’s $38 email marketing benchmark
• That high-ticket offers ($5k, $10k, $100k deal sizes) make even average cold email performance exceptional, since the cost structure stays fixed while revenue potential multiplies

In our previous lesson we talked about the cost to contact 10.000 prospects a month.

We arrived at a cost of $823.

This covered:

• the Woodpecker subscription
• finding all 10k prospect emails 
• 46 email accounts and 12 domains

Now that we have the total cost we can calculate the cost per lead. 

We will look at three possible scenarios in terms of campaign performance. 

Our first scenario is very achievable:

• a 3% reply rate 
• a 10% positive response rate – meaning 1 out of 10 replies is positive

Our second scenario is the campaign I used already a few times:

• a 13% reply rate
• a 11% positive response rate

And scenario three is one of our client’s campaign from the German space:

• a 30% reply rate
• a 17% positive response rate

Now we will do some simple math, please bear with me.

Scenario 1: 10k prospect, 3% reply rate = 300 replies *(times) 10% positive response rate = 30 leads.

Scenario 2: 10k prospect, 13% reply rate = 1300 replies * 11% positive response rate = 143 leads.

Scenario 3: 10k prospect, 30% reply rate = 3000 replies * 17% positive response rate = 510 leads.

Remember our cost? It was $823. Let’s calculate the cost per lead.

Scenario 1: So, $823 divided by 30 leads = $28 cost per lead (rounded up)

Scenario 2: Same cost divided by 143 leads is about $6 cost per lead

Scenario 3: Lastly with 510 leads we get a cost per lead of just $1.6

Okay, we covered the cost per lead!

Let’s take it a step further and look at cost per deal.

I will assume you can close about 10% of the leads.

Remember, a lead in cold email is someone that responded positively to your value proposition.

A 10% conversion rate is not unusual.

Scenario 1:  30 leads – 10% conversion = 3 deals. Our cost, $823 divided by 3 = $274 cost per deal

Scenario 2:  143 leads = about 14 deals and about a $59 cost per deal. 

Scenario 3:  510 leads = 51 deals at 10% conversion. 51 deals result in a cost per deal of about $17

So, a highly effective campaign = deal price you may never see in any other lead generation channel. 

One more step to go to get you to the final metric – the ROI.

We need to define a deal size.

Now each business will have very different deal sizes. 

You may have:

• high ticket offers
• as well as low ticket offers 
• and anything in between

In the lead generation space, agencies typically operate on retainers.

If I were to define an average starting deal price it would be about $2000. 

We will use this example to finally calculate the ROI.

Scenario 1:  

• 3 deals times $2,000 deal size equals $6,000 revenue. 
• To get ROI we take the cost off revenue and then divide by the cost.
• This will give us a 629% ROI or $6 return per $1 spent.

Scenario 2: 

• 14 deals results in $28,000 revenue
• Do the same math 3 k % ROI
• You can also say a 33 USD return per 1 USD spent

Scenario 3:

• 51 deals at $2,000 deal size mean $102k revenue
• Same approach we deduct cost and get over 12,000% ROI
• The return on dollars spent will be $123.

That was a lot of math, thank you for sticking with me!

Now remember scenario 2, a campaign from one of our clients in Woodpecker.

A return on the dollar of $33.

This is very close to the $38 I mentioned Litmus publishes each year.

Now you have a similar benchmark but for cold email!

Now let’s take a step back and imagine you have a high ticket offer for

• $5.000
• $10.000
• or even $100.000

deals…

The ROI will be:

• Through. The. Roof. 

One last thing…

I would add some backups into the calculation.

Get some extra domains and mailboxes to replace any underperforming ones. 

Don’t worry we will cover all of that in the technical setup chapter.

I hope this lesson was helpful. 

Please join me in the next lesson where I show you the flexibility of cold email.

Plus some more benefits!

See you there.