Cost per Lead Is Rising—Here’s How to Stay Profitable This Summer

By Dipa Gandhi

 

 

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As summer rolls in, many home service contractors eagerly anticipate an influx of work—from roof repairs and exterior painting to landscaping projects and power washing. But with that demand comes a challenge that’s been growing steadily: the cost per lead (CPL) is on the rise, and it’s cutting into profits.

Why Your Cost Per Lead Is Climbing

Online advertising, particularly through platforms like Google Ads and Local Services Ads (LSAs), has become more competitive than ever. More contractors are vying for visibility in the same geographic areas, bidding on the same keywords, and trying to outrank each other.

This bidding war drives up costs. According to WordStream, the average cost per lead in the home services industry has increased by more than 20% over the past two years. In some competitive markets, it’s not uncommon to see a single lead cost upwards of $100, as seen by 99 Calls.

But higher CPLs aren’t just about competition. Other factors are also at play:

• Ad Fatigue: Using the same ad copy or targeting strategies for too long can lead to diminishing returns.
• Broad Targeting: Campaigns that don’t tightly target ideal customers waste budget on low-quality clicks.
• Seasonal Surges: Summer is peak season for many home services, and more businesses advertising at once inflates CPCs.
• Platform Changes: Google’s frequent algorithm and platform updates can disrupt once-successful campaigns.

The Ripple Effect on Small Businesses

Let’s take the example of “Joe’s Exterior Painting” in Tampa. Joe was spending $1,000/month last summer and averaged 20 leads. This year, that same spend is netting just 12 leads. Joe’s job volume hasn’t dropped because of lack of demand—it’s the rising CPL that's shrinking his returns.

Without making changes, Joe risks either overspending to maintain job volume or reducing his ad spend and missing out on busy-season revenue. Neither scenario is ideal.

And Joe’s not alone.

Many small contractors face the same dilemma: rising CPL with no proportional increase in conversion quality. If leads are more expensive but not better, profitability suffers.

5 Ways to Stay Profitable Despite Rising CPL

Here’s what smart contractors are doing to not just survive—but thrive—despite rising lead costs:

1. Double Down on Organic SEO

Paid advertising is important, but organic visibility is the long game that keeps on giving.

• Optimize your website for local keywords and services.
• Keep your Google Business Profile updated with fresh photos, services, and posts.
• Ask happy customers to leave reviews regularly.

A cleaning company in Denver saw its lead volume double after investing in organic SEO, allowing them to scale back on paid ads without sacrificing business.

2. Tighten Up Your Targeting

Don’t cast a wide net. Aim for precision.

• Use negative keywords to eliminate unqualified clicks.
• Focus ad spend on zip codes and service areas that produce the most profitable jobs.
• A/B test your headlines and calls-to-action for better conversion rates.

This tactic helped a roofer in Austin decrease their CPL by 30% while increasing appointment bookings.

3. Capitalize on Lower Competition Niches

Not every service has sky-high competition. You can reduce CPL by promoting services with less demand saturation.

• Highlight niche services (e.g., “gutter guard installation” instead of just “roofing”).
• Promote seasonal specials or new offerings to stand out.

Less competition often means lower click costs and higher ROI.

4. Reactivate Past Leads

You’ve already paid for those leads—why not maximize their value?

• Reach out via email or SMS with summer service reminders or exclusive deals.
• Use tools to nurture cold leads with follow-ups and re-engagement campaigns.

A landscaper in Charlotte booked 8 new jobs in one week using a reactivation campaign targeting old estimates.

5. Track, Measure, and Adapt Quickly

Blind ad spending is a recipe for disaster in a high-CPL world.

• Monitor your cost per conversion, not just clicks.
• Know which ads, keywords, and landing pages convert best.
• Be ready to pause underperforming campaigns and double down on winners.

Contractors who review campaign performance weekly tend to see better ROI and avoid wasted spend.

Staying Ahead Means Staying Strategic

Rising lead costs don’t have to spell disaster for your summer profits. With the right combination of strategy, optimization, and re-engagement, contractors can maintain a healthy bottom line—even when competition heats up.

Instead of throwing more money at the problem, take a smarter approach. Focus on improving the quality of your leads, maximizing conversion opportunities, and leveraging the channels that bring long-term value.

Summer is here—and with it, opportunity. Make every lead count.