Generating leads is the bread and butter of marketing, right? Wrong. Generating high value leads is. That’s why it’s so difficult!
While we can all agree having leads is preferable to having none, there’s no doubt that some leads are more valuable than others.
But how do you determine the value of a lead? Once you understand your lead value, you can make better decisions for your sales and marketing teams.
There are ways of tracking leads where you ask ‘how did you hear about us?’. But let’s be real here. Customers might not be sure, they might even get it wrong. While marketing can be tough to track, it’s important to get right.
So, keep reading to find out more about leads, and how to understand your lead value.
What is a Quality Lead?
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.
In fact, it’s better to have a small number of high quality leads than a large number of mixed quality leads. Just think about your sales team. They’re the ones who will have to contact each and every lead. Their time is much better spent nurturing those leads that are a good fit for your product or service.
Now this blog isn’t about how to get more high quality blogs, though we do have a blog on improving lead quality on PPC channels, if you’re interested.
Here, we’re talking about how you can differentiate your leads and understand the value of your leads.
The first step is to acknowledge that different channels, content, and even keywords, will bring different results in terms of lead quality.
So, let’s look at how best to track your lead value.
Why Tracking Lead Value is Tricky
Lead value is a vital metric for any marketer. Sadly, calculating lead value isn’t simple.
Firstly, non-eCommerce businesses struggle to track their leads due to them converting via offline channels or tricky to track methods like form submissions, live chat and phone call. Connecting the dots between a new lead and their marketing data is pretty tricky in itself.
Want to find out how to track each and every marketing lead? We share a simple way to track your website visitors and understand who is converting, and where.
How to Calculate Lead Value
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.
A fairly simple calculation for lead value is:
Total revenue generated divided by the number of individual leads in your database.
But what is this actually telling you?
Let’s use a fictitious example to see the numbers in action.
Company A in 2020 had a total revenue of £100,000 and the total number of leads in the year were 200.
That would give a lead value of £500.
Advanced Lead Value Tracking
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.
Tracking Lead Value in Practice
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.
Amy 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 Amy 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.
How Ruler Analytics Helps you to Track Lead Value
Ruler is one such solution.
Here’s how it works.
Ruler tracks each and every user visiting your website. It tracks key marketing data like the channel they came from, the pages they interacted with plus any conversions like calls, live chat sessions and more.
When a user converts into a lead, Ruler fires all that data stored over to your CRM (or wherever you’re storing your leads).
Ruler continues to track the user, firing marketing data over up until the point of sale. There, Ruler scrapes the revenue data from your CRM and fires it back into your favourite marketing apps and tools.
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.