LSA cost per lead: how to tell if Local Services Ads pay off

With Google Local Services Ads you pay per lead rather than per click, and the price of a lead varies by trade and by city. That means there is no universal "good" LSA price to compare against — a price that prints money for a high-ticket remodeler can quietly drain a low-ticket service business. The only test that matters is your own: does one lead return more gross profit than it costs, at your close rate, your average job value, and your margin? Run it here.

Worked example: an HVAC company on LSA

An HVAC company gets 25 LSA leads a month at $55 each and closes 24% of them. Its average job is $1,200 at a 50% gross margin. Each lead carries a 24% chance of a job worth $600 of gross profit, so the expected gross profit per lead is $144.00 — after the $55 lead cost, each lead nets $89.00. Because roughly one lead in four closes, every closed job carries $229.17 of lead cost, which has to be covered inside the ticket price. Across the month, the channel nets $2,225. Verdict: LSA pays off for this company, with room to absorb a price increase or a slower month.

Two levers are specific to LSA. First, dispute out-of-scope leads promptly where the platform allows credits — every credited lead directly raises the channel's net. Second, answer the first call fast: LSA customers often contact more than one business, and the job usually goes to whoever responds first. Both levers move your close rate, and the close rate moves every other number on this page.