If you are a business that drives leads, I think you’ll agree that you can’t measure success without measuring the right Key Performance Indicators (KPIs).
Well, it turns out, you can drive success at a higher rate through proper measurements of the right metrics. It’s not as difficult as you may expect and with your new-found insights, you might be able to hit the ground running with your marketing efforts, instead of always lagging behind.
In today’s insights report, I’m going to walk you through what metrics are most effective to measure lead generation marketing.
So, let’s get to it…
As a lead generation business, you have many things to be focusing your time and efforts on, and measurement, not surprisingly should be one of them. Measuring your marketing efforts can assist with helping you generate more. You may be wondering how I can make a bold statement like that? Well, I’ll tell you why. Because when you are focused on the right things, instead of focusing on everything, you can see much more clearly.
Lead Generation Metrics You Should Measure
Metric #1: Conversions and Goal Completions
This one may be the most obvious, but measuring conversions and goal completions should be top of your list. You need to fully understand what you are getting from your digital marketing efforts to be able to make smart decisions on where to continue to invest.
Let’s take this concept one step further. Let’s take a moment to talk about the purchase funnel.
Because the purchase funnel is not as straight and direct as it used to be, and decisions are happening across multiple channels, it’s important to look beyond each channel when considering where your leads are coming from. No longer is last-click attribution the only option. If you are using a system such as Google Analytics, you can more granularly measure your conversions across channels by choosing an attribution model. There are many different attribution models including time decay, linear, position-based and so on. We talk more about attribution models in another post and you can read more about it here – Conversion Attribution Model.
There are two lessons in this first tip:
- Be sure to look beyond last-click attribution for a higher understanding of what digital marketing channels are assisting with each conversion.
- Two, don’t overlook the fact that not all your conversions are coming from a single channel.
Many times direct conversions can’t be measured because of the complexity of the purchase funnel. People are constantly weaving in and out of different marketing channels and devices. It’s hard to 100% know each lead generation’s path to purchase. Leads, that we think are driven directly, may have, in fact, come from other previous forms of digital marketing efforts. This is why it’s important not to overlook the fact that all your digital marketing efforts matter.
Metric #2: Conversion Rate
Next up is Conversion Rate. The conversion rate is the equation of clicks divided by conversions. The conversion rate key performance indicator is a great way to understand the percentage of possible leads compared to how leads are actually converted. A higher conversion rate is always better, but it’s important to see how conversion rates trend over time. If your leads are not converting according to your business needs, you’ll be relieved to know this is a metric you have the power to change.
Before I describe how to increase your business’ conversion rates, it’s important to also understand how lead generations and conversions vary depending on the industry. The types of campaigns you are running for your business will also make a huge difference in how many leads you are able to generate.
Conversion Rate by Industry
Optimizing To Increase Conversion Rates
The conversion rate is one of those metrics, along with Click-Through Rates (but that metric is for another Series), that you do have a small level of control over. You’re probably wondering, how? I’m going to tell you because it’s easy and many marketers don’t spend enough time or energy on it. I’m talking about testing.
If your conversion rate is not as high as you’d like, you’ve got to test.
Testing can be as simple as comparing 2 landing pages against each other. Use two different variants to see if one generates a higher rate of conversion. Changing your offer or ‘pull’ or adjusting the language on your landing pages will make your marketing efforts more enticing to your target audience.
Once you determine which variant drives greater success, you can swap out the underperforming item with a new variation to see how that performs against the original. Keep using this same process to continue to drive a greater conversion rate.
Metric #3: Cost Per Lead
When we’re talking about digital marketing, it always circles back to cost. As a lead generation business, it takes time and money to generate leads. If you want to be sure your marketing efforts are driving a solid return on your investment, cost per lead is an important key performance metric. Cost per lead is the calculation of total cost divided by the total number of leads.
When setting up your cost per lead numbers, be sure to be realistic. We often see lead generation companies pulling numbers out of thin air.
Really, a $30 cost per lead when your services cost $30,000? You may be more comfortable with investing more in generating good, quality leads when you take into consideration your close rate of those leads. Let’s take this concept one step further. Imagine your business operates with a $10,000 monthly marketing budget, you’ve generated 400 site visitors (if your CPC was $25) and you have a conservative 3% conversion rate. That will be 14 leads. Your close rate on those leads is 25%. You’ve just generated roughly 3 new clients. Your cost per lead just went up to over $2,857.
Now, under normal circumstances, you’d probably be flipping your lid, right? But, you’re smart and you realized that those 3 clients just drove $90,000 in revenue. That cost per lead isn’t so terrible now, is it?
Our final metric on the list today; Customer lifetime value.
Metric #4: Customer Lifetime Value
More often than not, we make the mistake of only measuring the value of a lead once. Often times, we forget that those leads will generate more value over time. Maybe the lifetime value of a specific lead will come in the form of a return customer, or future upgrade of services, a monthly membership, or a cross-sell of other services. So keep the Customer Lifetime Value metric in the back of your mind when looking at your return on investment.
I hope you’ve gained some valuable insight into which metrics you, as a lead generation business, should be reporting on and measuring. Follow the Pepper Gang blog for more updates, further insights into metrics, and recommendations for your brand.