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Lead Generation - Metrics and Costs

In measuring spending on lead generation, what are the most appropriate metrics to monitor and report and what are good efficiency or effectiveness benchmarks to measure the cost per lead (i.e., $50 per qualified lead? $500?)

Answers

Edf Rand
Title: COO/CFO
Company: American Exteriors, LLC
(COO/CFO, American Exteriors, LLC) |

As a B to B busines, we measure cost of leads generated and cost of leads issued for appointments. We then measure the quality of the appontments; demoed and of those demoed what were sold plus other categories such as no good and indicating quality of the lead and/or quality of the sales presentation.

We are also looking for industry benchmarks and best practices. We measaure lead costs a variaty of different ways in addition to mareketing costs as a % of revenue.

dave green
Title: director
Company: meclabs
(director, meclabs) |

The most important metric by far is the affect of lead gen on sales productivity. That's the point of lead generation. Additional metrics:
1. key conversion ratios
2. unit cost of each of those ratios
3. expense to revenue ratios for each
it's important to define the terms. Key funnel stages:
1. Clicks, traffic
2. Lead capture (someone shares their name, etc.)
3. Phone-ready leads (some of the leads will be duplicates; some will have bogus info, etc. so you want to weed those out)
4. sales qualified leads (right account, etc.)
5. Proposals and related forecast revenue
6. sales outcomes (won, lost, stalled) and related revenue
You need to define the above terms so that everyone is clear and speaking the same language.

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

Metrics are easy. Identifying the lead generation economics is difficult and will vary drastically based on the product/service you offer, i.e. lead time and conversion to sell a DreamLiner vs. a Ford Focus vs ticket sales. To fully understand the cost of a lead you should determine the costs through the sales cycle -
1) Identifying the Contact - This expense is primarily "time" and may include cold calls, calling warm leads, and/or calling past customers. The value of time is based on your business model. Advertising may play a role.
2) Relationship Development - This expense is primarily Marketing and may include Sales Calls, Travel & Entertainment, Marketing Collateral, Event Marketing.
3) Sales Fulfillment - This expense is composed primarily of Sales Discounts and Product Bundling.
4) Tracking - This expense is associated with your system to track contacts, leads to sales, i.e. your CRM.
Once you posess these four discrete components, each will serve as a seperate metric, i.e. the (Cycle #/Revenue). Track over time, and you will have a great picture as to the success of your efforts, and how they change over time.

Topic Expert
Dana Price
Title: Vice President, M&A
Company: McGraw Hill Education
(Vice President, M&A, McGraw Hill Education) |

We also look at CLV in addition to many of the above. Defining the term "qualified" is also key.

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