Lead generation, and the conversion of those leads, is the lifeblood of nearly every business. Of course, the better the quality of leads you have, the better your conversions and ROI. But if you don’t know how to precisely measure the following conversion metrics, your efforts could be falling flat, leaving you spending far more money, and missing out on far more opportunity, than you need to.
Now, every business has different funnels and different definitions of what a conversion is, but the metrics offered below should help you better understand your leads, how and why they convert, where to concentrate your marketing spend, and how to increase your ROI.
Optimize Your Funnel with These Calculated Metrics
1: Time to Generation – How long does it take for an initial website visitor to convert into a lead? To estimate this, simply take the total time on site by visitors, and divide by the number of leads generated. To reduce time to generation, dissect the data and find areas where you can improve on your lead capture.
2: Conversion Rate – How effective are you at converting site visitors or call verified leads / live transfers into leads? Divide the total number of leads generated by the total number of visitors over a given time. Then, optimize your site and test regularly to improve.
3: Cost Per Lead – This incredibly important metric shows you exactly how much money it costs to turn a visitor into a lead. Take your advertising and marketing budget and divide by the number of leads generated. By knowing this number, you’ll find weak points in your advertising you can address and optimize to lower costs.
4: Lead Value – What is the value of your leads? Take the total number of sales and divide by the total number of leads from each source. If you’re paying more for leads than they generate in sales from a particular channel, you’ll want to focus on channels that are profitable.
5: Lead to Sales Rate – How effective are you at turning a lead into a paid buyer or customer? Divide the number of converted leads (fully converted) by the total number of leads. You may find that you need to optimize your sales funnel to get this metric boosted. The higher your lead to sales rate is, the better you are at converting. This metric will also show you just how “quality” the leads you’re generating really are.
6: Lead-through-Funnel Rate – This rate measures your success at moving leads through your sales funnel. To get this rate, divide the leads that have moved to a further point in your funnel by the total number of leads, then multiply by 100. A good lead-through-funnel rate (depending on how large your funnel is and which vertical you operate) is roughly 12%, meaning 12 out of 100 leads should get past the initial entry. With this metric, you can work on improving your funnel to help motivate the lead into a purchase, and you can calculate for every part of the funnel.
Once you establish a baseline on your current efforts, these calculations can help you pinpoint areas of weaknesses, and areas of strengths. And by continually monitoring these six metrics, you’ll have a much better understanding of your leads, how and when they convert, where your ad dollars are most effective, and how to better monetize your funnel.
If you’re looking for advice on how to generate high quality leads that convert, and how the granular data you’ve collected on your website visitors can be better monetized, give Conversion Media Group a call.
We’re a performance-based digital agency specializing in helping you reach and exceed all of your KPIs.
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