If you aren’t measuring your lead generation activities, then you can’t accurately gauge its success nor make the changes required to optimize it. Unfortunately, many businesses pay little attention to lead generation key performance indicators (KPIs) and instead concentrate on end-goals and lagging indicators, such as revenue.
Revenue is the ultimate goal of lead management. Nevertheless, keeping an eye on other KPIs gives you a better shot at eventually improving your revenue. There’s no one-size-fits-all set of lead generation KPIs. The most relevant KPIs will depend on the nature, goals, processes, and target market of the company.
Still, the following five metrics will be meaningful for nearly all types of businesses.
1. Conversion Rate
Your website’s and social media profile’s analytics page may show your campaign has led to plenty of views, clicks, and page visits. That won’t matter much, though, if there are no conversions. The conversion rate is the proportion of your leads that complete a specific action on an email, landing page, or ad. You define the action at the point of creating your digital marketing campaign.
Conversion doesn’t necessarily mean a sale. Examples of conversion include a user making a purchase, downloading a white paper, clicking a button or link in an email, or completing a subscription form on your site.
Time-to-conversion is how long it takes a lead to move through different stages of the sales funnel. It takes some aggregating across multiple platforms if you want to have a high-level per-channel view of the time the prospect takes to proceed through the funnel’s phases.
Most important is the time it takes prospects to become paying clients. That said, other time-to-conversion measures are important as well because they show where leads drop off or where it takes an unusually long time for the prospect to move to the next stage.
3. Return on Investment
An ad’s return on investment (ROI) is the single most important metric in an advertising campaign. If you have dedicated a budget to advertising, you can establish the ROI by dividing the income generated by the ad by the cash you spent on advertisement. For example, if you spent $500 on ads and earned $1,500 as a result, the ROI is 200%.
ROI can be negative or positive, depending on whether your earnings exceed or fall short of ad spend. Since you’ll likely be advertising and generating leads across multiple platforms, you have to establish the ROI of different platforms. That way, you can scale up your ad spending on platforms that provide the most return while scaling down on those where your efforts aren’t paying off.
The cost-per-lead (CPL) is a different metric from the ROI. It’s a measure of the cost of obtaining the lead irrespective of whether the lead becomes a paying customer. If you are buying the leads, then calculating CPL is fairly straightforward. But you can also compute CPL for less direct means of lead acquisition.
For instance, in the case of organic SEO, total the money you’ve spent on content creation, contact promotion and management, then divide that by the leads generated by SEO. So if you spend $1,000 to acquire 200 leads, your CPL is $5. Generally, the lower your CPL, the better your profit margins.
5. Leads Per Channel
The number of leads you receive will vary by channel. Some channels will deliver high lead volumes. There could be multiple reasons for this. Perhaps you have invested more money into it, are using more current tools or it’s a channel that’s popular with your target audience.
By keeping track of these numbers, you will have a better feel of which channel is responsible for the majority of your leads and which ones you need to optimize or completely do away with.
Keep track of these metrics and you will always be ahead of the curve in your lead management efforts.