Web Inquiries versus Web Leads
Does your website have a dropdown that says, “How did you find us?” Does your sales team ask that same question to inbound callers? If so, you have a big problem with your sales lead tracking, which means your cost per lead and ROI metrics are completely inaccurate.
Your website should be smart enough so you don’t need to ask that question.
There's one question that every firm doing Internet marketing should be able to answer -- but one which very few can. Here it is:
What is our cost per lead on each Internet marketing channel?
How did you answer? Responses normally fall into two categories:
- Some firms admit they have no idea.
- Some firms think they know, but actually have no idea.
To know your cost per lead, you must first understand the difference between a website inquiry and a website sales lead. A website inquiry could be a phone call or form submission from someone looking for a job or trying to sell you something, while a website sales lead is a phone call or form submission from someone actually wanting to buy your products or services.
Many firms incorrectly use the term “website lead” when they are really referring to “website inquiries.” In reality, website leads are just one type of website inquiry; without proper lead tracking, you don't know whether your website leads represent 5%, 50% or 80% of your total website inquiries.
You must also understand the lead tracking setup that is needed on your website; there are two parts to this. The first is the inquiry type; two examples of this are form submissions and phone calls. The second is the marketing source, which could be direct, referral, SEO, PPC, Email, etc.
Without having these two critical pieces of information and being able to correlate them, you will never be able to know your true cost per lead by marketing channel.
"I know I'm wasting half of my marketing budget. I just don't know which half." - Heard on the street.
With today's sophisticated lead tracking technology, there's no excuse for your business to be in this situation any longer. Here's the way a firm's online lead generation process should look.
Make Your Website Smart with Lead Tracking
Step 1: Track Your Inquiry Types
It's worth noting that many firms fail to even display contact forms and phone numbers on their sites. Even if lead generation is not the site's primary purpose, it makes no sense to frustrate potential customers (and perhaps existing customers) by giving them no way to initiate a conversation. It's a massive error.
So: If you are displaying contact options on your site and tracking each type, you're already ahead of the curve ... but there's still a ways to go.
Step 2: Track Your Website Inquiry Marketing Sources
When firms fail to tie inquiries to their source, they are really fumbling in the dark when it comes to assessing the productivity of any particular marketing campaign or activity. Some of these firms -- the ones that think they know -- will increase spending on what are in fact low value campaigns. Other firms -- the ones that know they don't know -- will pull back on marketing activities across the board and unwittingly punish high value campaigns.
Step 3: Filter Your Inquiries into Sales Leads
- If you fail to filter, how do you know that what look like 100 form leads are actually 10?
- If you fail to filter, how do you know that you got 10 killer leads from your SEO campaign versus 10 so-so leads from your Email campaign?
The fact is, because so many firms fail to filter their leads, they operate under the false belief that their Internet marketing campaigns are working, when in fact certain channels are failing. And just as bad -- perhaps worse -- they may be oblivious to the fact that a modest-looking marketing channel, in terms of raw submissions, is actually generating the highest quality leads of all.
The point: Accurate lead tracking and filtering improve the quantitative and qualitative analyses of your lead generation efforts.
Step 4: Use the Data to Make More Money
- A firm with vague lead tracking sees 100 PPC campaign form leads (based on numbers from Google Analytics and Google AdWords), associated with a spend of $5000. It thinks its cost per lead is $50.
- Once accurate lead tracking and filtering are in place, the firm sees that it actually has only 25 true leads, making its true cost per lead $200.
Once you know the true cost of leads per channel, you are in a position to do something about it:
- The most obvious action step is to spend less on your high-cost lead campaigns and more on the low-cost campaigns.
- By monitoring lead cost trends over time, you quickly identify campaigns that need tweaking and ones that deserve an even bigger share of the budget.
Now, you can allocate your marketing budget more wisely right out of the gate, continue to spend more efficiently, and refine lead generation campaigns every month. Doesn't that beat not knowing which half of your marketing budget you're wasting?
P.S. - Don't Forget to Tie Leads to Sales
Knowing your true cost per lead gives you a handle on your marketing ROI. However, marketing is only half of your business acquisition equation. The other half is sales.
Once true leads have been identified, tracking them through the sales process is crucial; otherwise, you won't know your win-loss percentage, and you won't know how much revenue or profit you're earning per true lead.
One reason sales organizations fall short on converting leads into customers is wasting time following up on bad leads. On top of that, when sales reps are inundated with bad leads, they become cynical, which leads them to sour on marketing in general, and only go through the motions when following up on that tiny handful of really great leads.
These are serious, chronic business problems that can cause a firm to wither away. Managing lead generation the right way goes a long way toward eliminating the problems and setting up an environment that is structured for dynamic growth.