Measuring and Documenting lead generation COST success
If you read our blog post last week on lead generation performance measurement, you will know that we think tracking your lead generation efforts is essential. This week we will be focusing on how to track cost measurements. It is important to know what your costs are when acquiring leads and how to find out what those costs are, so you can use them determine whether the strategies you are using are effective or not. So, here is the next lot of things you need to measure in lead generation after you have tracked your performance!
Cost Metrics: these tell you what they cost associated with obtaining leads and traffic are.
1. Cost per mille (CPM)
If you are buying traffic through display ad verts you will definitely need to track your cost per thousand impressions - mille - or CPM. Why do you need to measure it? This medium is important because it allows you to evaluate and compare how cost effective various media vehicles are. You will need to measure this metric for every ad as well as within the campaign as a whole.
2. Cost per lead
This adds up the total amount you spent acquiring a lead – for example, the average cost per lead which uses the equation: money spent on capturing leads divided by the total number of leads captured. This must include all areas of costs:
- Variables: these are the costs that may fluctuate.
- Recurring: These are costs that are associated with capturing a lead like the cost of software.
- One-time: these are any costs that only need to be paid like creating a video or webinar.
Bear in mind that some of these one-time costs will be able to be used again making it cheaper for you the next time.
3. Cost per click
If you get your traffic through paid advertising, then you need to measure your costs per each click. This should be simple as the tool you are using should tell you what this is. You will need to track the CPC for every ad as well as all of the ads in the campaign. On Facebook, you can see on your insights and on there, it shows you the performance and click rates. If it different for every platform but Facebook has made it easier for companies to see where their costs are going.
4. Cost per Sale
Cost per sale which has also been referred to as cost per conversion, is the amount advertisers pay per sale or conversion that is generated by a certain ad. You find this out by simply dividing your total costs by your total revenue from sales.
Now, if you know your cost per impression or cost per click and your cost per lead - you can also track where in the funnel changes are happening and where in the funnel your costs are increasing or decreasing. If CPC stays the same but cost per lead goes up, then your costs in media buying are fine but the conversion of the clicks is less. Or maybe the flow and conversions all remained the same, but your clicks have become more expensive and that’s why your leads are more expensive, either that or your cost per sale has gone up.
Cost measurements are important for you to keep track of what you are spending and whether the costs are worth it for the leads you generate. Again, we want to be clear that conversion rates and cost rates are not the only thing you have to factor in. If people are active on your site and responding to your campaigns but not clicking the CTA and becoming leads just yet, be patient that will come. In addition to that, remember, you still have to convert your leads to customers and clients so there is more measuring to do even after the leads come in. Never fear, we will be there to guide you through it all and if it’s more leads you need we can get those for you too – email us on firstname.lastname@example.org for more information on lead generation. Next week we will be focusing on channel metrics and what to after you have gathered you leads!