When you invest in advertising, you want to see a strong return on that investment. Leads are crucial in determining success, but how do you measure their true value?
Not all leads are created equal. High-quality leads match your ideal customer profile and are most likely to engage, purchase, and become loyal customers. Medium-quality leads may not convert immediately but show interest that your sales team can nurture. Low-quality leads might not be ready to act now, but they contribute to long-term brand awareness.
Your business's lead strategy should align with your marketing and sales goals, such as:
- Driving traffic to your store or website
- Boosting sales for specific products or services
- Expanding your email or text message marketing lists
- Collecting customer testimonials and reviews
- Nurturing repeat business
Focusing on high-value leads—likely to bring the greatest return on your advertising spend—ensures that your marketing efforts are effective and your investment pays off.
Calculate The Value Of Your Lead
In marketing, you want to know your campaigns are paying off. Quantifying the leads you receive from your campaign is a key metric to success.
Here are three steps to determine the value of your leads:
- Calculate revenue associated with your marketing campaign.
- Tally up the number of leads.
- Divide the total revenue by the number of leads. This is how much each lead is worth.
In other words, if you spent $1,000 on an ad campaign and got 100 leads, generating $5,000 in revenue, each lead is worth $50. That’s a solid return on investment.
Comparing Lead Value Across Platforms
The lead value is an important metric for campaign success. It provides a window into what’s working with your marketing and what’s not, helping you refine your advertising strategy.
For example, if you advertise on different media, you can calculate the lead value from each platform and determine where you’re getting the most bang for your buck. You can shift ad dollars to more productive media (including radio!) to improve performance.
Other Ways To Assess The Value Of Your Leads
Beyond the basic calculation, there are a few other ways to assess how valuable your leads are, including:
Sales
The ultimate success metric is a lead that converts into a sale. The more revenue you generate from your leads, the more effective your advertising will be.
To help with calculating the value of a lead, look at the average amount that each customer spends in a single transaction. Depending on the sales cycle of your products or services, you can also look at the average amount a customer will spend in a given period of time.
Customer Testimonials and Reviews
A sale is just the beginning. After converting a lead, encourage customers to leave testimonials for your website and marketing materials or post reviews on platforms like Yelp or Google. The additional marketing boost from a review or testimonial increases the value of a lead.
Interviews and Surveys
Dive deeper into your customers’ journey. When customers interact with you or your sales team, ask about their experience with your advertising. What caught their eye? What motivated their action? Contact clients with surveys via text messages or email to gather valuable insights to refine your marketing strategy.
Repeat Business
Loyal customers are a sign of effective marketing and good business. If your advertising brings them back, it indicates that your messaging resonates. These repeat customers can provide critical insights into what makes your marketing compelling and detail lead response time, follow-ups, and engagement.
Engagement with Your Website, Store Visits, or App Downloads
Not all interactions lead directly to sales, but they still count. If a customer engages with your website, visits your store, or downloads your app, your campaign is on their radar. Use these opportunities to follow up with targeted promotions and ads. Lower-quality leads can plant the seeds for future business.
At Federated Media, our marketing specialists can help you determine the value of your leads and adjust your marketing strategy.
Contact us today to learn more about how to get the most out of your lead generation efforts!
