Lead Generation Hacks: Measuring Efficiency
In a previous post, we talked about the importance of a lead generation strategy to keep the wide end of the sales funnel full. In this post, we’ll talk about how you can tell how well your lead generation strategy is working.
Click-through rate (CTR)
CTR is a measure of how many of the people who see your content actually click on it. This might be customers who click on social media posts, search results, or email newsletters.
A high CTR is a good sign that your content is reaching the right people, and that you’ve presented it in a way that’s enticing and interesting to them. A low CTR might mean that your audience is too broad, and you’re serving your content to people who aren’t interested in it.
You don’t want to waste marketing funds on audiences that don’t care about your content, so CTR is a good way to keep an eye on that.
- Click through rate (CTR)
- Percent of people served with content who click through
- High: good content
- Low: irrelevant content, too hard to find CTA
After CTR, the next thing to look at is conversion rate. Conversion rate is the percent of people who clicked through to your content that then follow your call to action.
Conversion is a versatile statistic, and can apply to a lot of different aspects of your sales funnel. You can track the number of visitors who then sign up for a newsletter, the number of people who get a quote and then come back to make a purchase, or the number of people who open your email newsletter and use the discount code inside.
Time to Conversion
This is an easy stat, because it’s exactly what it sounds like. Time to conversion is the time it takes from when a visitor first interacts with you to when they follow your CTA.
This could be the time on site before a customer makes a purchase, the time on your blog before they download your ebook, or the time at your store before they move to checkout.
Time to conversion is especially important to keep in mind if your conversion process is long or complicated. Depending on what you’re selling, you might have to travel to the customer to give them a quote, customize your offer, and verify info.
Return on Investment
Return on investment (ROI) is possible the most important metric of your business, and the one you’ve definitely heard of before now. In basic terms, ROI is the money you get back from an investment in relation to the money you put in.
In lead generation terms, ROI is the money you make from your leads in relation to how much it cost you to get them in the first place. You’ll have to consider how much your average customer pays, whether they make one-time purchases or recurring payments, and how much business you’re likely to get from them over time.
On the cost side, you’ll need to consider both fixed costs and marginal costs of your marketing efforts. Every dollar that it costs you to acquire leads get weighed against the money you make back from them.
One of the most useful aspects of ROI is how versatile it is. You’ll want to keep an eye on the ROI for your entire marketing budget, of course. But you can also examine the ROI of each marketing channel individually to see which ones to keep spending money on.
And if you want to get even more granular, you can look into the ROI of individual campaigns, or even individual posts! For example, if you spend $250 boosting a Facebook post about a particular promotion, you would then compare that to the number of people who took advantage of that promotion to see whether that boost was worth it, and whether to boost again in future.
One Size Does Not Fit All
Before you jump into your analytics dashboard to start wringing conclusions out of the numbers, remember that the same metrics won’t be equally important for every business. Here are some things you should keep in mind:
B2B VS. B2C
If you’re doing B2B marketing, you’re probably looking for a few large clients, rather than lots of smaller customers like a B2C scenario. That means you should be focused on highly qualified leads over volume, and might be willing to spend more to acquire them.
Another consideration is the category your product falls into. Is it a recurring cost like web hosting, where a good lead will generate steady income for a long time? Is it a commodity like clothing, which is bought frequently but needs frequent reminders to keep customers coming back? Or is it a large item like a car or computer, which might generate big margins but is only purchased every five years or more?
You’ll also want to keep in mind the type of product you’re selling — specifically why people buy it. Is it a novelty item that people aren’t likely to buy more than once? If so, you’ll need to prioritize new leads over recurring ones. If your product is more of a luxury item, with high margins, then lead volume isn’t as important as lead quality.
Numbers Don’t Lie
But they can be misleading! In the modern world of digital marketing, there are far more metrics and numbers than you can keep track of, and lots of them won’t give you any useful information about your business or marketing strategy.
In order to make sure that you’re putting your marketing money in the best possible places, you’ll need to closely examine what you’re getting out of it. Taking the time to find out what works for you might be tricky at first, but in the long run, it’s worth it.