What Is A Lead Is Worth To Your Business?

December 15, 2018 Carol Forden

Do you know what a lead is worth to your business?

If you are going to build a sustainable business, you need a consistent stream of leads that continually fill your pipeline.

Or how much can you spend on advertising per lead and still be profitable?

Reviewing your data and calculating how much a lead is worth to your business you can get a jump on the competition.

Below are a few tips for creating an effective online lead generation campaign that will add to your success.

Step one determine what a lead is worth to you?

Is a lead (for this example, let’s define a “lead” as someone who visits your website) worth $0.25 to you? Ten Dollars? Or potentially 30,000 dollars?

You need to know cold what leads are worth to your business so that you can generate leads at a cost lower than the sales price of your product or service.

How do you determine the value of your leads?

The key is to track and continuously increase your conversion rates.

Conversion rates refer to the percentage of website visitors who take action you desire them to.

For example, let’s say that today,  200 visitors that come to your website:

  • 6 buy one of your products or services from your website
  • 8 fill out your contact form
  • 4 email you
  • 12 call you

In this example, 30 visitors took the desired action;

Or you had a 15% overall conversion rate.

And your conversion rate on buying online was 3%, on filling out the contact form 4%, and so on.

The next step is to determine how much each of these conversions is worth to you.

For example, let’s say:

  • Your average product or service sale on your website generates $1,000 of gross profit
  • 25% of people completing your contact form eventually buy from you at an average gross profit of $1,200 each
  • 50% of people who email you ultimately buy from you at an average gross profit of $1,100 each
  • 33% of people who call you eventually buy from you at an average gross profit of $1,500 each

In this example, for every 200 visitors, you would generate $13,120 in gross profit as follows:

  • $6,000 in gross profit from online sales
  • $2,400 in gross profit from contact form conversions
  • $2,200 in gross profit from email conversions
  • $4,500 in gross profit from telephone conversions

What Is A Lead Is Worth To Your Business?Which means that every visitor to your website is worth $656.00.

As long as you can drive visitors to your website at less than this amount, you will generate a profit.

How To Improve Your Conversion Rate and Drive Worthwhile Leads

Not only must you know your conversion rates, but it is critical for you to continue to test and track to improve your conversion rates.

By altering the layout of individual pages of your site, you may increase the overall conversions by perhaps 25%. This would mean that the average value per visitor to your site would jump from $656 to $820.

Adding in content marketing or a newsletter that allows you to build trust with your target audience is a low-cost way to drive conversions.  It also allows you to build a relationship with your target market.

Social selling is another tool that you want to have in your marketing toolbox.  Social selling uses a combination of both organic and paid social media tactics moving both new and existing customers through the customer journey. You can turn clicks and shares into revenue.

Not only would this jump allow you to increase profitability, but it would enable you to outspend your competitors and market in places and ways where they can’t (since they perhaps generate only $500 per visitor).

This is how you genuinely dominate your market.

A few other ideas to generate leads are:

Testimonials

Show testimonials to customers.

Produce a folder or book with testimonials, or show them on your website.

Offer a gift voucher if a new client will give you a testimonial or review on your website. Send the client an email asking for a review 1 or 2 weeks after they purchase.

Run a competition on Facebook

Offer a prize to prospects who participate in a competition.

For example, a financial planner offering to give a free financial plan to a family

Entrants submit picture and reason why they need a financial plan to budget for their children’s college education in Facebook competition. This leads to 30 entrants which were narrowed to 10 finalists who were posted to Facebook. People could vote in a Facebook poll.

The other benefit is that you now have a list of 30 clients who need a financial plan so you can talk to them and offer a special deal or something similar.

Use Your Network

You can send a letter to 10 other businesses saying that each person recommends 10 clients to the other businesses. This would lead to a list of 100 potential clients for each business

For example, a financial planner could send a letter to 10 other professionals. This would build a unique referral network of 100 clients. Each person recommended 10 other clients.  Each promotes the offer to their clients

Gift Voucher

Offer a special offer for current clients to give to friends or contacts.

For example, a massage therapist could give 5 x 30-minute foot massage vouchers to current clients to give to friends that can be redeemed during quiet times. Once the new client uses the voucher, you give them a 1-hour massage for a 50% discount.

Then when they use the full massage then offer a package of 5 massages.

If a current client has 3  referral cards used then offer a free massage. Then when the referred clients sign up for a long-term package, then referrer gets a free massage.

A new home salesman could send postcards with $50 gift certificate to a new Italian restaurant if made an appointment to inspect a home. Pay $25 to the restaurant for every redeemed gift voucher.

Cross Promotion

Do a cross-promotion with other stores or businesses. Promote a special offer to be used and at another store who reciprocates with a special offer for their clients to use at your store.

Promoted with surrounding stores.

Discount cards

Email your mailing lists and offer secret after-hours specials and offers door prizes for everyone that brings a friend.

Free Offer

Send an offer to your Dream 100 clients for a free preliminary report related to your area of expertise, i.e financial analysis, a seminar on your specialty with a discount for your service.  This shows potential client how you are going to perform and your expertise and knowledge.

Now you can make some very strategic decisions with your business.

Did I miss anything or is there anything you’d add?

 

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