The multifaceted world of marketing lends itself to various misunderstandings, and the specific realm of lead generation is no different.
Misconceptions that plague businesses and their understanding of what’s really involved in generating high-quality leads can be big hurdles to performance and results.
So to shed some refreshing light on things, we spoke with some lead-gen experts who offered their insights on what the most common myths are, along with the corresponding truths of the matter. They shared so many responses that we had to break them up into two posts. The first part is below.
Myth: It’s all about the cost per lead
While many marketing teams are focused on getting a specific number of leads at a certain cost per lead (CPL), the reality is that there are other numbers to focus on instead: cost per acquisition, cost per upsell and cost per lifetime value of a customer.
“It’s easy to grow a campaign that will create thousands of leads for a nickel a piece, but you run the risk of none of them ever converting,” says Jeffrey Cody, senior marketing manager at Campaigner. “I will lose thousands of nickels and not get anything out of the program.”
To emphasize the need to not get blinded by cost per lead of a campaign, Cody uses an example: “If you have a model that says you think your best close rate is $50 per lead to get a program done, you might find an opportunity where $1,000 per lead closes at 80 percent and is worth half-a-million dollars per customer.”
There’s also the matter of people assuming CPL is an indicator of overall lead worth. “Unfortunately, it’s simply not that easy,” says Dannie Evans, division director for PBP Media. He says there are many factors that go into tracking and analyzing results (more on that below), from the top of the funnel through to the close of a lead-generation program, to determine the actual value and what you should pay for sales leads.
Evans lays out this example of two lead programs:
1) $25 cost per lead, generates 1,000 leads = $25,000 total cost