Lead Metrics
Setting Up Your Metrics
In order to improve your marketing and sales performance you must understand where you are and were you want/need to be. Lead metrics and analytic tools are the keys to success in any high performance business and especially with Internet lead generation.
The path is straight-forward, but depending on your processes, execution may be challenging. Start here:
- Understand the metrics that can and should be tracked
- Track and collect the primary lead data (this can be challenging, if not impossible, without a strong lead management system)
- Calculate key metrics in real-time
- Analyze and then make adjustments to marketing channels, lead management intelligent work flows, or sales processes
The categories below will give you a brief overview of some of the more popular and established metrics lead suppliers and buyer are using to analyze and improve performance.
Basic Tracking Categories
The following are some of the basic building blocks of other lead metrics and indicators. Make sure you have these secured and accurate to give you a solid foundation on which to build more complex analytics.
- Total Leads Received: This should be tracked by unique source or channel identifiers. This measure will assist you in not only accounting for all leads from a particular marketing channel, but also calculating various conversion ratios, cost per actions, and ROI metrics.
- Total Attempts to Contact: This tracking action will allow you to understand the integrity of the original lead data and potentially arrive at conclusions about the quality of the marketing approach used to generate categories of leads. This measure is also critical to optimizing your sales work flows and maximizing sales resources.
- Total Contacts Made: Like the attempts metric contact can be used to assess lead quality and optimize sales resources. It is also potentially the first building block to assessing cost and ROI metrics through Cost Per Contact, which can assist in evaluating return on contact or telemarketing teams.
- Total Applications Taken: This is where the proverbial rubber meets the road. Applications are the first consumer indication of buying potential. As a result, this makes it a strong metric for building lead quality and buyer intentionality metrics. It is also the foundation of conversion, cost, and ROI metrics.
- Total Sales (Booked or Funded): This is ultimate and best tracking counter to build marketing and sales performance metrics. For example, total sales is used to calculate final conversion, cost, and ROI metrics. Unfortunately, due to the extended time required of most sales cycles it should only be used as a trailing indicator since many variables within marketing channels and sales processes will invariably occur within the time it takes to get a final sale number.
Performance Metrics
Performance Metrics are your dashboard style indicators that allow you to make performance enhancing adjustments. The following are some of the most popular:
- Contact Rate: This is probably the earliest, statistically relevant indicator of lead quality and sales performance. It is a great measure of the degree to which a consumer entered into a marketing channel with intention. In a similar line of analytics, when combined with application conversion rate, it can be used to draw conclusions about the quality of the lead generation methodology (e.g., a high contact rate with a low application rate may indicate co-registration or the consumer opted-in and provided information, but perhaps for a different purpose. It is also an indicator of sales performance and follow-up on leads.
- Application Conversion Rate: This is another great early indicator of lead quality and sales performance. It is the building blocks of analyzing cost and ROI measures. It can also be used to begin sales and operational forecasting.
- Sale Conversion Rate: Again, as with total sales, sales conversion is the ultimate metric of quality and profitability, but it comes to late to have a lot of operational value. However, it is the key building metric to performance and profitability; therefore, always considered in your analytical reporting.
- Cost Per Application: This is where you start to see if you are making money on a marketing channel and whether your sales teams are earning their keep. It is foundation to assessing cost and ROI. I should be also be used to evaluate the return on contact or telemarketing teams.
- Cost Per Sale: Did we make money? This is the metric that hits your bottom line. Using this in connection with your revenue per sales tells you if you are making a profit. Remember, if you don’t know this number or it is bigger than your revenue per sale make a change! If you don’t know the number, get a lead management system. If you do, and it is upside down, compare it with other marketing channels. If the result is that all channels or sales teams are losing or below market averages then make a change to your sales process. If the poor performance is only reflected in that one marketing channel then make the adjustment in marketing.
- MarketingChannel ROI: Like total sales, ROI is the capstone indicator of marketing and sales performance. However, like total sales, it is too is a trailing indicator and impacted by extended sales cycles. So, remember to use it as an overall strategic metric, not necessarily an operational or tactical decision point.