Getting new B2B clients is tough. So what should you look at when analyzing your lead generation efforts? Here’s 9 lead generation metrics to help you measure your success.
Measuring your lead generation can be daunting, especially if your sales and marketing activity spans a number of channels. We’ve whittled down to the 9 most important metrics to help you analyse and optimise your sales pipeline.
As the name suggests, potential reach estimates the number of people who could potentially see your brand and buy from you. Potential reach can come from many different channels, depending on whether you’re B2B or B2C. For B2B, it’s generally the size of your possible prospecting audience.
There’s a few different ways you can measure your potential reach:
Comparable to your potential reach, actual reach is the size of your actual audience, and how many people you’re currently reaching with your sales and marketing activity. This metric is helpful as you can see what portion of your potential reach is coming to fruition, and where you need to improve.
You can measure actual reach by looking at things like:
Engagement describes the ways in which people engage with your business, and can be measured in different ways, across different channels.
Your engagement metrics will vary depending on what primary channels you use, but you can measure it using some of these methods:
Lead volume measures how many leads you have overall in your sales funnel, regardless of their likelihood to convert.
Lead volume can be hard to pinpoint, as it’s very personal to your business. But it’s usually easiest to collate how many leads you have, and how you gained them as a lead, e.g. through email prospecting, social media or SEO.
Qualified lead volume is the number of leads you have that are most likely to convert into a sale. They can be categorised into cold, warm and hot. All lead and conversion metrics are linked together, but making distinctions of the different metrics instead of having an overall lead conversion rate will help determine what does and doesn’t work, and therefore what needs to change.
From your lead volume metrics, you should then go on to score your leads to see which are most likely likely to result in a sale. It’s no good to have 500 leads if only one of them converts to a sale. This is where analysing metrics really matters, as it can ultimately affect your revenue.
Lead conversion rate analyses how many people carry out a specific action which turns them into a lead. For example, what percentage of those visiting your website become leads.
Here comes the maths! You can use a simple calculation to work out your lead conversion rate. Let’s use the web visitor example. If you wanted to work out your website’s lead conversion rate, you’d use:
Number of leads ÷ number of website visitors x 100 = lead conversion rate %
So if you had 10,000 website visitors and 200 leads, you’d have a 2% lead conversion rate (200 ÷ 10,000 x 100 = 2%).
This is possibly the most important metric for a business focusing on revenue. It tells you how much a lead is costing you on average, and should be viewed as a whole and also for each channel you use. Lead costs can come from a variety of things, such as adverts, web design and any tools used to increase that lead, and cost per lead.
Cost per lead enables you to see which channels are costing the most money, and whether this aligns with the value of the leads generated. If a channel has a small cost per lead, but a high lead value, it shows you that specific channel is working well, and is scalable.
Time more for maths! Use this calculation to work out your average cost per lead:
Total marketing spend ÷ total leads = cost per lead
For example, if you spent £5,000 and gained 30 leads, you’re looking at a £166.66 cost per lead (£5,000 ÷ 30 = £166.66).
Lead value is basically that: the how valuable your leads are to your business. You can assign an average monetary value to individual leads, measuring on a channel-by-channel basis, as well as throughout the entire business.
You can calculate lead value using a simple equation:
Total sales value ÷ total leads = lead value.
For example, if your revenue for a period was £15,000 and you had 10 leads during this time, your lead value would be £1,500 worth of revenue per lead (£15,000 ÷ 10 = £1,500). So if you spent less than £1,500 on a particular lead, you know you are getting more out of that lead than what you’ve spent generating them.
Customer acquisition cost shows you how much the it costs to acquire a new customer (not to be confused with cost per lead). You should aim for as low a number as possible, while still gaining customers at a decent rate.
Customer acquisition cost takes into account the cost of all sales and marketing activity, such as advertising costs, and paying your marketing and sales reps.
You can work out how much it takes to acquire a customer by using this calculation:
Total amount spent on sales and marketing ÷ number of customers = customer acquisition cost
This metric is the most helpful when it’s considered alongside advertising costs and return on ad spend. For example, if you’re running three ads, and all three result in 10 customers, this may seem like a good situation to be in. But if you paid significantly less for one ad, and it results in just as many customers but with a much lower customer acquisition cost, it’s clear that this ad is superior.
Ok, so lead generation metrics can be a lot of information to digest at once, but measuring your results means you’re are more likely to get leads that result in conversion, rather than leads that don’t complete. Knowing lead generation metrics can also inform lead nurturing decisions, resulting in higher revenue.
If you take the time to see what’s working, you can be sure to learn more about your business and be able to adjust it accordingly to stay ahead of your competitors.
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