Digital Marketing Metrics — Are you tracking your Cost Per Lead, New Leads Added & Revenue Per Lead? If not, you might be throwing your money away.
There are 3 digital marketing metrics that will help you create more effective marketing campaigns. Tracking your cost per lead, new leads added and revenue per lead can help you adapt your digital marketing efforts to get better results.
Let’s face it, we are all working with a limited marketing budget. In this quick post, I want to show you how to implement a few of simple calculations to help you maximize your efforts in creating a successful strategy for 2017.
So often, we get busy executing and we don’t have time left over to analyze all of our efforts. It seems we are in a constant churn to get things done.
It’s the curse of working IN YOUR BUSINESS vs. ON YOUR BUSINESS that keeps so many entrepreneurs stuck and frustrated. Plus, I’ll be honest, unless planning makes you happy, it all just feels a little overwhelming.
If spreadsheets and calculations cause you to reach for the Excedrin, don’t worry. I’ll show you how to calculate the important numbers, it’s easy. I promise.
Knowing Your Cost Per Lead, New Leads Added and Revenue Per Lead Will Help You Create More Effective Campaigns
Measuring lead stats can help you increase the effectiveness of your digital marketing campaigns.
It’s easy to get caught up in the vanity metrics associated with digital marketing. Too often, entrepreneurs are judging the success or failure of their business on how many likes, followers, and email addresses they have and they are not measuring whether or not those ‘leads’ are leads that can convert to customers.
By tracking these three metrics, you will be able to adjust your digital marketing efforts to get the greatest ROI possible.
- Cost Per Lead (CPL)
- New Leads Added (NLA)
- Revenue Per Lead (RPL)
How to Calculate Cost Per Lead:
Effective marketing campaigns have a beginning and end date. The first thing you want to do is set the time frame for tracking when the campaign will begin and when it will end. It is also helpful to break down your list by lead source. You will want to track each source separately as well.
Here are all of the items you need to calculate your Cost Per Lead:
- Campaign start and end dates
- Separate by lead source if utilizing more than one platform for the campaign
- Track your spending by platform — Facebook ads, Twitter ads, PPC, etc.
- For all new campaigns, your starting point is 0 leads
- At the completion of the campaign, calculate the total number of new leads added
- Take the total number of leads added and divide that number by the total campaign spend for that platform
Why you need to know this —
By knowing your cost per lead by source, you will be able to allocate your marketing budget more effectively. If you find that it costs you less money to get more leads on one platform over another, you may want to shift some of those marketing dollars to get the best ROI possible.
Here’s a simple calculation to come up with your CPL:
Every industry has a different average for cost per lead and there are a ton of factors that shape that number. You should do research for your specific industry to determine the averages. Here’s an interesting info graphic from MadisonLogic.com
How to Calculate New Leads Added:
Keeping track of New Leads Added helps you track your efforts over time to determine the potential of future campaigns.
Here are all the numbers you need to track New Leads Added:
- Current number of leads separated by platform
- Total number of leads added by campaign, per platform
- Total number of leads added, combined
Why you need to know this —
You’ve all heard that the money is in your list. By tracking the number of new leads added to your list, you can better determine if your marketing efforts are getting you in front of enough people. It’s also helpful when tracking your conversion ratio and Revenue Per Lead which I will explain next.
How to Track Revenue Per Lead:
Revenue per lead is the amount of money generated from one lead, tracked by campaign or for a period of time. This number is KEY to planning for growth. In order to have a successful digital marketing campaign, you must know how much revenue you will generate from your marketing campaign.
The goal with all of these metrics is to help you get higher ROI.
To calculate your Revenue Per Lead, you simply divide the total amount of revenue generated from new leads within a specific sales campaign by the total number of new leads in that campaign.
Why you need to know this:
You need to know how much money each new lead will generate. Knowing this will help you better estimate a future campaign’s value.
I’ve studied our numbers and I know that when I convert a qualified lead acquired through a webinar ad, the average revenue potential of this lead is $834 over the course of 12 months. My webinar leads convert at 3 for every 150 people who opt in. I need to work on getting those numbers higher. My goal is 5 per 150 and $1500 over a 12 month period.
I know that for every 100 likes I get on FB, I get 3 qualified leads in my funnel and they convert at $283 over the course of 12 months. If they end up in my webinar funnel, then the conversions are considerably higher.
The lesson here: do more webinars, convert my likes to leads.
I have a client and her numbers relate very differently. For every qualified lead converted through a webinar ad, her customer has the average revenue potential of $9521 per 12 month period. She converts 1 person for ever 1000 people who opt in.
When she is speaking live, on stage, her conversions triple.
The lesson here: public speaking generates more revenue per lead but it is also much more expensive to acquire the lead when you factor in travel, time away, time/staff to acquire the speaking engagement, etc.
Tying it all together
By tracking these numbers, you can get a better idea of how effective your marketing campaigns are. You can also hone in on what you need to adjust to get better results.
- Your Cost Per Lead is important for forecasting future marketing efforts.
- Your New Leads Added is important for estimating list growth and targets related to your email marketing campaign.
- Your Revenue Per Lead is important because you can better estimate the revenue potential of your list over time.
The goal in tracking this data is always — to increase ROI.
I’d love to hear what you track in your digital marketing efforts. If you enjoyed this post, please share it with your business owner friends and comment below. Also, feel free to email me if you have any questions.
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Lisa Bollow | Business Strategist
I help clarify the journey of being an entrepreneur for over-achieving, passionate, creative business owners. I want to remove the overwhelm of building a business with simple, step-by-step programs, systems and support.