Are You Hiding the Truth About True Cost-per-Lead?

While today might be thought of as a Golden Age of B2B Marketing – what with the advent of Social Media, email, inbound, blogs and more – many companies are challenged by the economics. For while there are more ways than ever to produce sales leads, most companies find that demonstrating the value of lead generation, and comparing the relative merits of one method over the other, are becoming harder than ever before.

The problem it turns out, is that it’s almost impossible to compare the cost-per-lead for sales leads produced by different methods to one another. This is because different lead generation methods result in different types (i.e. “qualities”) of sales leads: An impression, a click, an inquiry, an attendee, a business card, a referral, an exposure, an email address, a visit, and a confirmed appointment are all different. They all drop you off in a different place in the sell-cycle, and they all have different values. So when you try to calculate the cost-per-lead – or more importantly, compare their ROIs – you can’t.

Making matters worse, when you try to pass them off to Sales as equal, you get confusion, and often rejection. And “lead scoring” doesn’t solve the problem; it only highlights it.

To calculate your “true” cost per lead, you need a common denominator – a standard definition of a sales lead that can enable you to calculate your cost-per-lead regardless of how it was generated.

In B2B marketing, the best common denominator – one that works regardless of whether you’re doing Internet advertising, social media marketing, email marketing, SEO, direct mail, telemarketing, or networking – is:

“An appointment with a decision maker who has a need for your company’s products or services, and who wants to talk with you about how you can help.”

To be sure, it takes time, effort and money to convert some types of “sales leads” to an appointment. But the fact is that someone has to do it – whether it’s done by telephone, email or smoke signals. Someone has to qualify the lead; and the cost of doing so needs to be included in the cost of the lead – not in the cost of selling.

Once you compare the cost-per-lead from your different marketing mix elements on an apples-to-apples basis, you may find that methods that look good on paper don’t look so good in practice. But it’s better than hiding the truth.

Contributed by Jeff Josephson, President and Chief Executive Officer of LeadGen.com, a service of Josephson Venture/Marketing, Inc., (JV/M) in Moorestown, N.J.  For a white paper on “What’s the Cost of a Sales Lead” visit www.LeadGen.com/CPL. Jeff can be reached at 856-638-0399 x101 or Jeff@jvminc.com