A good digital marketer does not operate based merely on hunches but on solid, reliable and accurate data. They rely on verified information to influence their decisions particularly in the next steps to take in their marketing campaigns. The same principles apply to lead generation, and digital marketers must rely on proper analytics to measure the success of their campaigns – and act according to what these metrics tell them.
A recent study highlighted that lead generation has become a very important aspect in sales and marketing that marketing professionals are increasingly integrating into their work responsibilities. This would be working with the overall goal of generating leads that have the biggest opportunity of getting converted into sales. The problem however, as the study highlighted, is that up to three-quarter of respondents don’t know how to measure their lead generation efforts properly or have a limited way of measuring success.
With the abundance of information available online, it would be quite difficult for brands, products and services to stimulate and capture the attention of their targeted audiences. They can however do so by conducting an extensive lead generation campaign to attract targeted customers right into their virtual doorstep. To help small business owners gauge the success of their lead generation efforts, Digital Marketing Philippines shares the following guidelines to kickstart their campaigns.
1. Understanding the New Marketplace
But before we dig deeper on how to properly and effectively measure lead generation success, it is important for small business owners to understand the importance of doing so in the context of the new marketplace. Unlike traditional markets where new customer acquisition is usually achieved with push sales and marketing strategies, the new online marketplace involves a new evolution in purchasing behavior – where consumers buy from vendors and providers they trust and have discovered by themselves.
What the chart above indicate is a very significant shift in consumer behavior. Consumers are taking the initiative to look for suppliers and behaviors that will supply them with what they need, and not the other way around. This involves a higher level of trust that can only be nurtured by good lead generation and lead nurturing techniques – developing a higher and more personal customer-supplier relationship that is built on trust. Business owners should realize this important aspect of lead generation so they can properly and effectively measure the success of their campaigns.
2. Measure Important Lead Generation Metrics
The Internet and the online marketplace has evolved so much that simply measuring the success of your lead generation campaigns by merely measuring the volume of leads generated will not be enough to properly gauge the success. You will need to track and monitor other important metrics, like these ones below, which will be in line with the most important aspect of your business – your revenues.
- Click Through Rates (CTR)
The CTR is the measure of how many targeted audiences clicked on the links on your lead generation channel in proportion to the number of recipients of that particular campaign (ex: lead generation email). What the CTR will tell you is how relevant your lead generation campaign in to a particular lead segment or category.
A low CTR will indicate that you are marketing the wrong kind of content to a particular segment, while high click through rates will indicate a good response from your audience. These insights will tell you how you can improve on your campaign so you can generate even more favorable results that will prove the success of your campaign.
- Conversion Rates
Conversion rate is an even more important metric than CTR as it indicates how many of those who clicked on your links and campaign channels actually perform a prescribed set of actions that will turn them into leads or even sales. The type of conversion defined will of course rely on the type of business you have and at what particular stage in the sales funnel will you measure as a conversion point. This can include the completion of a survey form or a customer completing the checkout cycle after purchasing an item.
- Time to Customer Conversion
The length of time a targeted audience turns from being a mere lead into a full-pledge paying customer is also an important metric that you should include in you lead generation success monitoring activities. What this metric will tell you is how fast a particular consumer segment will respond and take action towards conversion for a particular lead generation campaign. Some may be slower while others generate quick response times, giving you insights on how effective your lead generation content are – allowing you to make more effective adjustments to your campaign.
- Cost per Customer
The cost that you spent per lead before they become a paid customer or client is also an important metric. It will not do your business any good if your leads will not ultimately lead their way into conversion, or if it takes excessive cost (that you lose profit altogether) to turn one lead into a customer. Business owners and digital marketers should remember that the purpose of lead generation is not merely to generate leads but to generate paying customers at a cost that will still turn you profits.
3. Lead Scoring
Success in lead generation can be achieved by nurturing high quality leads with the prospect of ultimately converting these leads into customers. So, how do you identify high quality leads? You can do so by Lead Scoring, which is basically a process of ranking and identifying leads in terms of their probability of converting into sales. The following are some metrics that you can measure to determine sales readiness of your leads so you can effectively score and rank your leads.
- Lead Qualification
The qualification of a particular lead will depend on how your business or sales team define them. A qualified lead may be one that represent companies, organizations, industry or professions you are specifically targeting. You may also qualify leads based on their profession or even with their purchase history. It does not mean however that you simply disregard leads that do not fit the profile you set. Lead qualification will just give your insights on which particular leads you will prioritize in nurturing.
- Lead Profile Contribution
Profiling your leads according to segment, demographics, or any other qualifications your sales and marketing team has identified will provide you good indicators as to which particular lead profile will have the biggest contribution in terms of conversion. Again, these will tell you which particular leads will you nurture and focus on to facilitate conversion.
- Lead Profile Deal Size
You can also profile and qualify leads based on their buying volume of deal size. It will give you insights as to what particular segment, title, industry, or any other segmentation will make the most purchases. This will provide you insights as to what particular segment you will focus more on your lead generation and marketing campaigns.
4. Other Common Lead Generation Metrics
Measuring the success of your lead generation campaigns will rely heavily on the common metrics described above. These will provide you a good indication as to where you stand on your campaigns so you can make adjustments and improvements accordingly. However, if you want a more extensive and more in-depth analysis of your lead generation performance, you can also track and monitor other lead generation metrics, including these listed below:
- The percentage in your sales pipeline (those already in the purchasing process) that were generated as a direct result of your lead generation efforts.
- The percentage in your closed sales that were generated as a direct result of your lead generation efforts.
- The volume of your Sales Qualified Leads or SQLs.
- The percentage of your SQLs that eventually turn into sales.
- The Cost Per Inquiry (CPI) which is computed as a ratio between your Total Lead Acquisition Cost with respect to the Total Number of Inquiries your lead generation campaign produced.
- The Cost Per Lead (CPL) which is computed as a ratio between your Total Campaign Cost with respect to the Total Number of Leads your lead generation campaign produced.
Lead generation is can be likened to a skill and an art form that every business owner and digital marketing should learn and acquire. There is also a science behind lead generation wherein doing a set of processes properly and according to best practices will deliver the results you need. And like any science, the success or effectiveness of your process will depend on how well you measure the performance of your campaign – and taking appropriate actions based on these metrics that will help you improve and enhance your overall campaign.