Want to measure your lead value but not sure where to begin? We walk you through the challenges of lead tracking and solutions you can implement to better understand your lead value.
When it comes to the monthly report, you want to track your lead volume. But the volume of your leads on its own isn’t enough.
And while you might think having some leads is preferable to having none, in reality, that’s not actually the case.
But, how do you determine the value of a lead? With this data at hand, you can make better decisions for your sales and marketing teams that will grow your business.
So, keep reading to find out more about:
Not all leads are created equal. A marketer’s job would be easy if all they had to do was generate leads. The trick is generating a large number of high-quality leads.
But what makes a high-quality lead? Well, it’s simple really. Revenue.
If a lead converts into a high-cost sale, then it’s high-quality.
Of course, this relies on you determining quality after the face. But, there are often tell-tale signs of a lead being high-quality.
They can include:
If you can determine these qualities in advance, you can get a better understanding of the quality of your leads. And, if you can attribute your revenue to your marketing in real-time, you can quickly identify where your most valuable leads come from.
Note: Do you want to learn more about tracking your leads and better understand how to optimise your lead generation process?
Download our guide to lead generation and tracking for a deep dive.
Lead value is simply how much each lead you generate is worth to your business. While cost per lead helps you understand how much money you need to invest to drive new leads, lead value helps you understand how much your leads are worth.
Lead value is a valuable metric for marketers to track as it can illustrate how much each individual lead is bringing in.
This helps you set budgets for your paid advertising and other marketing initiatives.
But remember, a lead doesn’t guarantee a sale.
While leads are great, they only get you so far…
You can calculate your lead value with the following formula.
It’s surprisingly easy to underestimate the true value of your leads. It’s easy to just see your leads as contacts in a database. By understanding your lead value, you’ll get a good sense of how your marketing is working to bring in new prospects.
So what is this calculation actually telling you?
Let’s use a fictitious example to see the numbers in action.
Company A in 2020 brought in £100,000 of sales and revenue and their total number of leads in the year were 200.
That would give a lead value of £500.
While this is a great starting point, it leaves us with a few questions:
Our fictional company, Company A, now know a rough idea of their lead value.
But how does this help them optimise their marketing for their current opportunities?
It doesn’t help. At all.
While they now know there’s a huge amount of potential revenue to be gained from their leads, how do they choose where to focus their marketing efforts, and budget.
Remember how we said all leads aren’t equal? There are many reasons for lead value to alter. In marketing, a popular one is the source of the lead.
Let’s say Company A wants to compare two sources of lead data. The first, source A, is a list of leads who downloaded a white paper in return for their data. The second, source B, is paid-for outbound leads generated from a targeted search on a lead website.
Let’s recalculate lead value. But this time, we’re going to split it by source.
Here, both sources had a total of 60 prospects. Of which, Company A knows Source A generated £85,000. Meanwhile, Source B only generated £15,000.
Source A’s lead value was therefore £1,416, while Source B’s lead value was just £250.
So of course, Source A was much more fruitful in terms of generating revenue. Especially if you add in the fact that Company A would likely have had to pay for the leads generated in Source B.
Ok, ok, so tracking lead value with fictitious data is pretty easy, right?
But, when you have anonymous visitors to your website converting into leads by many different methods, tracking each and then understanding lead value becomes really complicated.
Let us explain with an example.
Jane visits your website. She found you via an organic search for which your blog post ranks number one.
She doesn’t fill in the form on your landing page. Instead, she calls and converts that way.
While you can track Jane as a new lead from a sales perspective and track her conversion from a marketing perspective, you can’t correlate the two data points.
That means you can’t be sure what’s driving those new leads. And while you can track conversions, you can’t link them to real people to see if they go on to become sales.
Don’t worry, there is a solution.
Marketing attribution allows marketers to track their leads and every touchpoint they have.
While you might be able to calculate your lead value holistically, what about on a channel or campaign level?
You’re going to fall short or fall into a wormhole of data.
With Ruler Analytics, you can track every new lead, plus their original source. And, Ruler will continue to track that lead through the full customer journey. Plus, when they close into revenue, you’ll be able to attribute that sale back to the lead and all of the associated marketing interactions.
So, you can close the loop on each and every lead and understand your lead value from a channel, campaign and even keyword basis.
Ruler will allow you to understand what’s working well to drive new leads, but most importantly, what’s working well to drive revenue.