How do you measure your marketing performance and cost? Do you set a total budget for marketing and spend accordingly in ads, print and more? Do you just feel it out and if things look like they’re working, let it go? Or do you change the subject when someone brings up marketing your company? Either way, if you’re not budgeting for leads, you’re very likely measuring your marketing inefficiently, if at all.
First off, let’s define a lead, as different business types have different products or services that can be measured. If you sell a product online, a lead (as it pertains to this article) would be a qualified visit to your website, before the sale is made. If you sell services, it gets a little more difficult to determine the cost of a lead – but a lead is a customer contact brought to you by a marketing piece, before it gets turned over to your salesperson. If you own a retail store, it’s more difficult to track, but consider store visits, along with website hits and phone calls as leads. Basically, we’re calling a lead a potential sale, before it hits the sales stage, as the effectiveness of a marketing piece can’t include the effectiveness of your sales staff, retail store, or website.
Why is breaking down marketing cost and return by leads more effective than simple dollars and cents? You can separate your marketing from your sales, and better identify successes and failures in each. I’ve heard quite a bit about how poor an advertisement is performing, when it’s a killer ad and generates a lot of phone calls or online submissions. “The leads aren’t good leads,” they say, when really, the sales staff or the product itself is at the core of the problem. But the company doesn’t see the total dollars coming in increase in proportion to the cost of the new website or ad, so the marketing gets the blame. Or conversely, they’ll run an advertisement and see total sales increase, when really, the source of the increase is seasonal, reputation, or some other form of marketing or general increase in demand.