Cost per lead – is value being lost in the CPC digital metric?

12 March 2018

Digital marketing has fast become a numbers game. Many businesses are striving for traffic to their website via pay-per-click campaigns and digital advertising like banners, Facebook Ads, search ads. But while you may be playing high in the numbers game via CPC (Cost Per Click) campaigns – are those numbers converting into real sales and quality lead opportunities?

The question for this discussion becomes, isn’t a highly qualified sales lead worthy of a different classification?


Cost Per Lead

One of the challenges in the B2B environment from a marketing perspective is that it can be difficult to define what a sales lead actually is.

Is it a name on a database or in an email chain? What about someone who has read a Whitepaper or even your blog?

The problem with considering these actions as leads, is that it is difficult for a sales team to make them tangible i.e. make sales. A visitor simply isn’t a lead just because they have come across your website or content. The real value is derived around whether if they have a real need for the information, products and services you offer.

Internal sales and marketing teams understand that a lead is an appointment via phone or in person with a decision-maker who has a need and is seeking information from the sales person. It is specific.


The value is in the qualification

One of the most interesting things to note is that while your unqualified leads like CPC may be cheaper on a per-lead basis, they are always more expensive on a cost-per-sales basis. In other words, they don’t do very much to generate sales – After all, B2B is always going to be a niche and particular market.


Calculating leads

So how do you identify leads from visitors in the digital landscape?

When measuring the performance of your B2B marketing program the biggest indicator of success is cost per initial appointment. This also needs to take into account the eventual cost-per-sale, your revenue and your profitability.

The most simplified equation we could locate to determine which of your digital channels works best consists of a combination of the following two equations:



Let’s break this into steps…

1) Calculate all visitors to your website within timeframe [such as 30 days] from all of your digital channels
[Email, Social Media Platforms, Search, 3rd Party, Other]

We will now calculate a CPL for each of these traffic sources in steps 2.

2) Calculate the conversion rate from each digital source (using Analytics) within timeframe
[Thank You or Contact Page, Sign Ups, Sales purchases]

3) Calculate all leads from your CRM or DMS from same timeframe



4) Change equation to add in the cost per each channel within timeframe
[Email, Social Media Platforms, Search, 3rd Party, Other]

This will give you your cost per lead figure. Which channels make the most sense for your business?

You’ll find a more comprehensive breakdown on how to calculate your Cost Per Lead here.


Attribution data can help

Having all the digital data in the world is not going to help marketing and sales teams chase the right leads. As the number of leads increases so too does the complexity of attribution models. Attribution data can help to express more fully what value is derived from each channel on the customer journey. For marketers and executives, this information is useful to forecast growth and help reduce costs.


Cost Per Lead Campaigns

This type of campaign can be preferred by B2B organisations as it gives a business total control of their brand throughout the entire process. Qualified leads in our experience always lead to an optimised ROI. For 17 years we have been delivering sales growth from B2B lead generation for our clients, talk to the team at MIH today.

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