Use a consistent definition of a written policy
Before comparing lead sources, decide what counts as an outcome in your agency’s records. A quote, an application, and a written policy are different stages. Apply the same definition and observation period to every source you evaluate.
The basic acquisition calculation is simple: divide the spend associated with a group of leads by the number of policies written from that group. This calculator measures lead spend only; keep labor and other agency expenses separate.
Lead cost per policy = lead spend ÷ policies written.
At $25 per lead and a 12% close rate: $25 ÷ 0.12 = $208.33 per policy.
This measures lead spend only and excludes labor and other agency operating costs.
A Homefield planning example
For an illustrative month with 200 qualified home insurance leads at the $25 Scale rate, lead spend is $5,000. A 12% planning close rate implies 24 policies, which gives $208.33 in lead cost per policy. The $25 rate applies to 200+ qualified leads per month.
The 12% figure is a planning expectation, not a measured average or a promise. Your actual result depends on territory, carrier appetite, pricing, and follow-up. The same $25 lead costs $416.67 per policy at a 6% close rate, or $138.89 at 18%. This is why the conversion assumption needs to be visible.
Try your own assumptions
This calculator uses projected outcomes, including fractional expected policies. For a retrospective analysis, use actual policies written and your actual costs. Inputs stay in this page and are not submitted or stored.
Do not confuse acquisition cost with profit
A policy’s premium is not the same as agency revenue. Use the revenue your agency actually earns under its agreements, then account for the costs you incur to quote, place, and service the business. Retention and renewal revenue can matter, but they should not be assumed from a new lead cohort with no history.
A lower acquisition cost can still be a poor outcome if the business does not fit your agency. Conversely, a higher acquisition cost may be workable for a different book. Decide using your own operating data rather than a vendor’s generic return claim.
Keep cohorts comparable
Label leads by source and arrival period. Give each group a comparable amount of time for quoting and binding. If one group is older, it has had more time to convert. Track unresolved opportunities separately instead of counting them as either certain sales or permanent losses.
Show both lead-only costs and total acquisition costs in your review. Include disputes or credits when they are actually resolved, and note changes to targeting or follow-up that affect interpretation. See Homefield’s current pricing.