Are you able to calculate your lead generation in a B2B inbound campaign?
Well, let me start by telling you that the most important elements you have to calculate in your lead generation business activities aren’t the cost-per-click, (CPC), cost-per-impression (CPI) or even cost-per-lead (CPL).
Are you among those people who neglect to measure Lead Close Rate and Customer Acquisition Cost? Whatever the size of your campaign you probably do better if you get this onto your worksheet. When measuring the performance of your B2B marketing program, these are top of the list. There is plenty more to include, but what really matters is your eventual cost-per-sale (CPS) and/or campaign unit net profitability. Just browse or ask any CEO, CFO, CMO or business owner and they will confirm that.
If you start with the wrong metrics it can dramatically blur your decisions, and remember, marketing is based on maths and C-suite will ask for those calculations reports. They won’t care if you have 1000 good leads that will take 4-6 months to convert into a sale, 10 years ago perhaps, but not so much now. Instead, show them that you’re in control – you have 100 warm leads that convert almost instantly – then you’re in business.
To be honest, the number of leads doesn’t matter as long as you can show them the money.
How to calculate Inbound Marketing Lead Generation
This is how people normally calculate the cost of how to generate leads.
Quarter total cost: £1000 / 100 = £10 Cost per lead (CPL)
You’ve calculate your leads, but your boss emailed you saying he wants more details. You’re now in the front line and you need to get it right.
What sort of content should you really measure?
Your boss needs valuable data to analyse and understand how the business can improve further, not that he wants to test you. Your latest campaign report will be useless if you don’t show him the closing rates. To answer those questions add and/or ask yourself these main questions.
Here are the key elements to focus on:
- Value per lead/campaign topic (VPL)
- Lead Close Rate (LCR)
- Monthly % Of Closing in X social media campaign
- % Of warm lead/Closing Lead To Customer (CLTC)
- Customer Acquisition Cost (CAC)
- Life Time Value of your customer (LTV)
- Content Topic Action Taken (subscribed, download…)
- Cost Per Marketing Channel used (CPMC) (cost per lead X number of leads)
Once you’ve considered these, you may email your boss with confidence. The above are essential for him to measure his initial investment. Also, he probably needs to figure out the team’s performance and he also needs to think through what to do next.
If you see something not right – don’t be afraid to change it. Trust your guts and adjust accordingly or change strategy and tactics. To help you out, remember that a good conversion rate to start with is 1 in 4, so you would get 10 new clients/customers every 40 warm leads. So, we have to calculate those from a leads to customer point of view.
I hope you’re following the idea. You should Always calculate lead close rate #LCR per campaign - if possible the lenght of time needed plus the % it takes to close that same lead #CAC Click To Tweet.
Average Lead Close Rate
This will help evaluate the health of your marketing funnel, that’s all the way from the top to the bottom. Bear in mind that it’s difficult to get it right and/or to be perfect. But, what is important is to keep trying, and make sure it works.
Calculating Average Lead Close Rate: (ALCR)
Example: let’s say (for the sake of this exercise) you had 1,000 leads in June, and you’ve worked out that you converted 25 in customers from the thousand:
Be aware that this may not be the same for your specific industry .
But for now here are a few important recommendations for you to take on board:
- Control your taxonomy topics, integrate and set it in your analytic reporting tool
- Pull up type of action taken through each inbound channel used – example: “Social media checklist download” via website
- Lots of people forget to analyse their own code when using affiliations! Make sure you understand these tracking code and if is working correctly once implemented.
A few questions to gauge how well you’re doing.
- How quick an you clearly measure your leads?
- How good are you or your team at qualifying leads?
- Are your sales team wasting time calling leads that are unqualified?
- Are you able to track your inital leads per channel?
If your Average Lead Close Rate is low, then you have a problem. You will need to start asking questions:
If your ALCR is high, great! That means your leads are highly qualified and being converted into customers.
Next time, we’ll follow the pattern and I’ll explain more about Customer Acquisition Cost.
If you need help setting up, organising a campaign, or calculating leads per channel/campaign get in touch via our contact page or call us here + 44 1252 679885.
Thanks for reading. Feel free to share this post. #LCR; #CAC; #ALCR