The buying process has fundamentally changed over the past two decades and has effectively put lead generation at the forefront of the marketing ecosystem. Buyers are now able to do their own research online and access countless sources of information, whether it’s through search, social media platforms or online publications.
We no longer have to depend on a sales person to understand the pros and cons of a product or service. More increasingly, consumers have already made up their mind or have narrowed down their options to a small handful before they’ve engaged with the brand at all or had a chance to try it out.
In lots of ways it’s all about making sure that you are being found rather than finding customers. Forrester reports that in a recent survey, over 74% of business buyers said they conduct more than half of their research online before purchasing a product online. The chart below from Marketooutlines the significant shift in the buying process.
With such a huge abundance of information on potential buyers’ digital body language, it’s important for brands to effectively evaluate and measure their lead generation strategies to attract new customers. A solid lead generation strategy will allow you to build trust and make it much easier for your sales team to convert the leads into revenue.
Because of the increasing complexity of online marketing and the increasing number of channels its crucial to have accurate tracking to ensure you are making the right decisions. Let’s check out a few key metrics and benchmarks you should be tracking from a paid media perspective when it comes to lead generation campaigns:
This refers to the total number of users who clicked on your advertisement in proportion to the overall number of users who saw said advertisement. CTR rate is in many ways an expression of interest and will tell you how relevant your ad is in relation to the customer segment you are targeting.
Conversion rate is a primary KPI in lead generation and it measures the rate of conversion yielded from users who clicked on your advertisement. It is important to note however that not all conversions are created equally and different conversion actions can have different values. It’s imperative to assign proper values to these conversion goals to get a real sense of the value of each action a customer makes along its engagement with your brand.
Cost Per Lead
CPL is your total ad spend with respect to the total number of leads your campaign produced. Marketers should establish and monitor CPL benchmarks for each product or service they are promoting to ensure their campaigns are running at maximum efficiency. A close check on CPL, just like CTR and Conversion Rate will also help you spot seasonality and other trends which you can use to your advantage as you craft your marketing strategy.
Site Abandonment By Qualified Visits
This is the ratio of qualified visits who didn’t convert over the total number of visits. Are potential customers getting to your landing page and leaving? This could be a sign that the landing page is not optimized for that particular audience and you could be losing business. Look at other Google Analytics metrics such as time on site, bounce rate and pages per session to get actionable data on areas for improvement.
Is also good to make sure that you have proper CRO optimization in place to make the most out of your paid media efforts. You can reference VWO’s blog for awesome resources and ideas on how to improve your landing pages.
It’s important for your sales team to have plenty of leads to be able to consistently build their sales pipeline. The more leads you have the better but these are not always generated the same way so you need to understand which ones are more likely to convert. There are two main types of leads:
A marketing qualified lead (MQL) is a lead which fits your target market profile. MQLs are also those users who have raised their hands and shows some interest in your offering. This could be through a demo, trial, or article download so an effective lead nurturing process is key.
A sales qualified lead (SQL) is one that has been vetted and their intent to purchase has been verified. This person or company has met several sales criteria and should be a high priority.
Lifetime Value LTV
Customer lifetime value or LTV is a great way for you to gauge your ROI. This requires knowledge of the amount of times you get repeat business from the customer. Once you have that information, its relatively easy to calculate:
Average Order Value X Repeat Purchase Rate X Customer Acquisition Cost
This KPI will give you good long term insight as to which customers segments you want to focus on.
MQL To SQL Ratio
This is merely the percentage of total marketing qualified leads that turn into legitimate sales qualified inquiries. Why do you want to measure this? Because this is gives you a good pulse on how your marketing and sales team are working together. More often than not, there are disconnects between these which could cost precious revenue and potential sales.
Related: AdWords Agency Checklist
Make sure that there is not a disproportionate amount of MQLs that are not working their way down the pipe and converting. If this is the case, it’s time to go back to the drawing board with your lead scoring and nurturing process. Check out Oracle Marketing Cloud’s lead scoring guide for actionable steps to get your strategy on track.
Cost Per Customer
Having a good understanding of how much time it’s costing your sales team to acquire a customer will prevent you from inefficiently wasting their time and potentially losing out on better opportunities. Keep in mind that lead generation is not simply to generate as many leads as possible but to produce customers that will generate profits for your business.
Wrapping It All Up
There are several other metrics which you can look at to determine the best way to get discovered by potential customers. All companies, products and services are different and each will have their own unique set of KPIs and metrics that need to be examined closely. Your success with lead generation will be largely determined by how effectively you can track these. Take time to outline which of these indicators are most important for you and make sure you can accurately assess results.