Decoding Google Ads Costs per Click for Coworking Spaces

When you’re investing in Google Ads for your coworking space, you’re probably hyper-vigilant about how your money is being spent—and rightfully so. It’s vital to make sure you’re getting a real return on your investment. 

While there are a ton of numbers you can track, this article will explain everything you need to know about one of your most important data points: your Cost Per Lead.

Let’s dive in.

The Dollar Value of New Leads: Cost Per Lead, Defined 

In terms of Google Ads, your cost per lead is essentially a calculation of how much money you spent to get a person through your virtual door.

They’ve seen your ad, clicked in, and then converted by booking a tour, completing a form, or calling your coworking space, and your cost per lead (CPL) is how much that process costs you.

How to Distinguish Between Cost per Lead vs. Cost per Click

While they sound similar, cost per click (CPC) and cost per lead (CPL) are different things.

Your CPC is the feeder into your CPL.

Every time Google serves your ad to a viewer, there’s a chance they’re going to click it. And, if they do, you pay for that click.

On the other hand, your CPL is the subset of those people who have clicked your ad and then actually completed your conversion action. 

Why Cost per Lead is More Important than Cost per Click

Your CPC and CPL are fundamentally intertwined. Together, they create your conversion rate, which is the percentage of people who click that ultimately end up converting.

Let’s say, for example, that your CPC is one dollar and that 10% of those clicks result in one lead.

By that math, it would cost you ten dollars to acquire one lead for your coworking space.

It’s easy to get caught up in conversion rates and CPC but, ultimately, your CPL is the most important metric to focus on.

Why?

Because your cost per lead is the one that ultimately creates revenue opportunities for your coworking business.

Once a lead is in your funnel, you have the opportunity to nurture them through your sales funnel.

At Spacefully, we focus on CPL because our ultimate goal is to generate new high-quality leads. We are consistently trying to reduce your cost per lead regardless of the cost per click.

The Cart or the Horse: The Impact of Your Ad Budget on Your Cost per Lead

Contrary to common misconception, your budget does not inform your cost per lead.

The reality is that your ad budget could be $500 or $10,000 and your CPL could be $50 for both. 

Your CPL is ultimately determined by the keywords you target and the assets that go into your ads—such as the copy, images, and calls to action that you use.

Rather than starting with your budget, the best way to look at your ad budget is to reverse-engineer your goals. That’s how we approach Google Ads at Spacefully. 

Think of it this way:

How much space you need to fill → how fast you need to fill those spaces → how many tours you need to do → how many leads you need to receive to get one new member → how many clicks you need to receive to get one lead 

Now, let’s bring that to life with some numbers.

You have 10 private offices to fill →  you need to fill those offices in six months → you’re converting 10% of your leads, so you need 10 leads to fill one private office → it takes 100 clicks to get one lead → your CPC, CPL, and timelines will dictate your optimal budget

Based on this equation, you can determine how much you should invest in Google Ads based on your cost per lead in order to reach your goals.

Let us do the math for you. Contact us today for a free consultation.

Total Addressable Market: The Impact of Geographical Boundaries for Coworking Spaces  

Budget and pacing are important factors, but it’s also essential to understand the concept of your total addressable market (TAM). 

Whether you have one location or ten, coworking spaces are inherently local businesses.

This means your potential members will likely be within a 15- to 30-minute driving radius. 

Within that radius, you have a finite number of prospective members, and this is your total addressable market.

So, even if you want to spend $100,000 and fill your coworking space tomorrow, you may not have the total addressable market to meet this goal. 

How Cost per Lead Varies Between Single vs. Multi-Location Spaces

Typically, the CPL is a bit lower for multi-location spaces than for single-location spaces. Our hypothesis at Spacefully is that this can be attributed to optionality.  

Generally, when someone is looking for a coworking space, you want to know where it is and its proximity to you. 

Most people will be looking for spaces within 15 to 30 minutes of their location and, since many multi-location coworking spaces are fairly close to one another, it allows them to choose from various options, all from the same brand. 

Reciprocal access also factors into this equation because it allows people to access multiple locations and amenities.

Services and Competition: Two Factors That Influence Cost per Lead for Coworking Spaces

There are a ton of factors that influence cost per lead, but your services and local competition all have a hand in it.

If you’re one of five coworking spaces offering dedicated desks in your market, you’re probably going to have a higher cost per lead on that service due to increased competition for that same keyword.

On the other hand, if you’re the only space offering a more unique service in your market—like part-time private offices—you’ll probably see a much lower cost per lead. 

Calculating the Long-Term ROI of Your Google Ads Spend

When you’re looking at your cost per lead, there’s another factor that’s important to consider: the lifetime value of a member. 

Think of it this way:

Your cost per lead for a private office is $150 → it takes 10 leads to sign up a private office member → it costs you $1,500 to close that deal

But here’s where things get interesting:

Your private office memberships are $1,500 per month → your average private office user stays for 2 years → the average lifetime value of one private office member is $36,000

These numbers are strictly hypothetical and every space is different, but it’s important to understand these calculations when it comes to building your marketing budget.

Tips for Reducing Your Cost per Lead 

When you’re looking at reducing your cost per lead, it all comes down to how you manage your Google ads account. In the simplest of terms, this comes down to:

• Your ad quality and account strategy
• Your keywords and their relevance
• Your landing pages and conversion rate

Those are kind of the three key pillars of reducing your cost per lead. 

If you’re feeling confused about how to optimize your cost per click and fill your coworking space as fast as possible, don’t worry. That’s where Spacefully can help. 

Want to learn how we can supercharge your lead generation? Book a free introductory call to learn how Google Ads can bring new members into your space starting today.