The “cost-per-lead” metric measures how cost-effective your marketing campaigns are when it comes to generating new leads for your sales team. A lead is someone that has simply expressed interest in your product or service by completing a goal. This can be by filling out a form, calling you, etc. Cost-per-lead is a metric that is closely related to other metrics such as the cost of acquisition, or how much it costs to acquire new customers. The purpose of this metric is to provide your marketing team with a real dollar figure so they can understand how much money is needed to spend on getting new leads for your business.
The following is an example from local solutions:
Consider your company spent $1,000 on your pay-per-click (PPC) campaign and 10 users convert to leads:
Cost per lead = $1,000/10= $100
If this is too high in comparison to the cost of your product or service — $100 per lead has a different value for a business selling luxury cars than for a toy store — you know you'll need to adjust your pay-per-click (PPC) campaign accordingly.
It’s important to remember that leads are not revenue. That’s a whole different metric-- CAC, or Customer Acquisition Cost. This is how much it costs to finally gain a customer, from start to finish of the sales funnel. A lead is just someone who is interested in potentially buying or learning more about your business and offerings.
The ultimate goal is to minimize your cost-per-lead. If your cost is low but your number of quality leads is high, then that’s a sign that your marketing campaign is doing great. However, if your cost-per-lead is too high… Well, then it may be time to reevaluate your campaign and if it’s worth continuing. That’s why it’s imperative that you have a marketing agency that can handle these numbers with expertise. Finding the cost-per-lead enables professionals to calculate sales goals, potential ROI, and determine advertising budgets. These are numbers that are crucial to measuring the success of your business and marketing campaigns, so you want to make sure they’re not being overlooked and calculated with precision.
TargetContact, powered by Target River, is the best lead generation service money can buy.
We analyze your industry across the board to calculate lead potential from customers seeking your business, and give you a fixed cost per lead and potential monthly lead volume. Simply put, we make your phones ring, and your cash registers ding!
The more leads you have, the more high quality traffic, or possible customers, are led to your website! And the more people on your website, the more sales you make.
Before TargetContact: After TargetContact:
$150 Cost Per Lead $46 Cost per Lead
Let’s imagine your typical prospect is Jen, a woman in her 30’s who enjoys interior design, health and fitness, and is currently remodeling a start-up home or “fixer-upper”. Understandably, she’s decided she needs some help. We can reach Jen with a targeted approach geared to generate an inbound lead from her!
But what’s an inbound lead, you ask? It brings customers in when they see a piece of content or ad that suits them! An outbound lead is a little different, where the business is reaching out to customers instead of customers reaching out to them. Both are very useful in marketing, but it is nice when you can focus on getting customers to come to you, rather than the other way around. You want them to be intrigued and be able to learn more. TargetContact gets customers to come to you so that you can focus on what matters.
Don’t struggle to get quality leads and don’t pay outrageous prices for them, either. Cost-per-lead is an essential metric to track. Remember, leads may not be sales, but they lead to them!
Provide us with your target geographic market, the types of lead you want, and we will do the rest to prepare a TargetContact plan that’s right for you!