Lead generation is what the sales start from, so naturally, many companies spend much time, energy, and resources on it. According to HubSpot, 50% of marketers consider lead generation a top priority.
At the same time, lead generation is a pretty challenging task. It's necessary to constantly track relevant metrics to build an efficient strategy and check whether it works properly or changes are required. In the article, you'll find information on the key lead generation KPIs and tips on determining which of them are relevant to your business.
Important Lead Generation Metrics
With the correct set of lead generation KPIs, you can see where the efforts are falling short and make adjustments to strengthen them for business expansion. Here is a list of crucial lead-generating indicators that might assist your staff in bringing in new clients.
Conversion Rate
The conversion rate (CR) determines how many qualifying leads have become actual customers. A broken link, a wrong target market, or a disorganized SaaS sales funnel are all examples of issues that negatively affect your eCommerce conversion rate.
You can calculate the conversion rate by the formula: CR = number of sales for a set period / leads generated over the same time.
Website Traffic
It is a solid conversion KPI to use when evaluating the success of marketing and sales efforts. You may keep track of the traffic volume coming to the website over time by using analytical tools like Google Analytics or Ahrefs. Apart from that, with this metric, you'll be able to identify what the customers require as they move down the sales funnel.
Bounce Rate
You can learn a lot about your content from the website's bounce rate. First of all, it is the frequency of users visiting the website and whether or not they continue to the next section.
A high bounce rate indicates that either the site didn't pique users' attention or puzzled them. In this case, it's worth reconsidering your targeting. You may be advertising to the wrong audience, or the information provided may be insufficient. A low bounce rate, on the contrary, indicates that the right customers can easily find the website, intuitively navigate through it, and engage with the content.
Cost per Acquisition
Your team's efficiency is determined mainly by how much you spend on lead generation. This metric is called cost per acquisition (CAC). It shows whether you're remaining within budget and whether the efforts yield a positive return on investment.
CAC is сalculated by the formula: marketing spend / number of new customers from a campaign.
Cost per Lead
Cost per lead (CPL) is a crucial lead generation KPI, particularly when it comes to sponsored advertising activities. This number can help determine which channel generates the most leads, how precise your social media targeting is, and how much money you have to spend on lead generation.
Here is how to calculate your cost per lead (CPL): CPL = total marketing spend / total number of new leads.
Lead Quality
You don't want to waste time creating a ton of leads that aren't going to convert. Lead quality is a crucial KPI for giving lead volume stats some perspective.
There are several ways to gauge the quality of lead, including:
- The proportion of opportunities to leads;
- The proportion of leads to customers;
- Time to convert.
The higher the percentage of leads that turn into opportunities, the higher the quality of the initial ones. Comparably, the leads-to-customers metric shows how many of your initial leads actually become paying clients. The time it takes for leads to convert can also be used to determine their quality. Since high-quality leads are typically well-informed and ready to buy, they convert more quickly.
Lead Value
The overall value of the leads helps forecast how much revenue you're pulling in from incoming sales to choose a lead generation strategy more wisely.
Use this simple formula to calculate it, or look at how many leads your team qualifies and how many of those result in a conversion. The formula is: lead value = total sales value / total leads.
Average Revenue per Customer
Average Revenue Per Customer (ARPC) is the term used to describe the typical monthly revenue produced by each customer. The metric assists in identifying which kind of customers are most beneficial to your company. Define the different client types to comprehend the profitability of each, target the right market group over time, and organize upcoming marketing initiatives.
You can calculate average revenue per customer the following way: ARPC = Total revenue / total customers.
Customer Lifetime Value
Another key lead indicator that digital marketers need to track is the customer lifetime value (CLTV).
Using CLTV, you may estimate how much money one customer will bring in over the course of their relationship with the company. Numerous elements of your marketing, upselling, and customer service activities may have an impact here.
The formula for determining the CLTV is the following: CLTV = lead value x average customer lifespan.
Email Marketing Performance
Since email marketing is one of the major ways to generate leads, some essential email marketing KPIs should be monitored.
- Open rate keeps track of how many recipients really opened your email.
- Conversion rate measures how many people clicked on the link and then took a particular action.
- List growth rate measures how quickly your list is expanding.
- The forwarding rate reveals the proportion of subscribers promoting your emails to others.
Engagement
The engagement rate basically indicates how interesting your content is. Engagement is typically associated with social media. Social media networks provide tracking and analysis, which makes obtaining this information quite simple when required.
Track the number of followers, likes, comments, savings, and reposts. Additionally, you can monitor engagement through the metrics for lead and customer conversions, as well as the proportion of website traffic attributable to social media.
How to Identify Which Lead Generation KPIs are Relevant for Your Business?
Each organization will have a unique set of KPIs since each of them has its own objectives, target market, and operational procedures. Therefore, the methods for generating leads and acquiring customers are also different. To determine the appropriate KPIs for the company, keep your business objectives in mind.
Here are the essential considerations for identifying lead generation KPIs and metrics:
- Target audience. Depending on the target market, you may sell to a small business or an enterprise. Understanding the main traits of your audience, the industry they are in, and the appropriate ways to communicate with them can help you choose the lead generation KPIs and metrics.
- B2C or B2B. Whether the company is B2B or B2C will largely determine your lead generation and marketing strategy. As a result, you can choose the measurements and KPIs that will aid in growing clientele. The metrics mentioned above concern both types of businesses. However, depending on the sales procedure, B2B companies may need to track other KPIs, like meetings booked and attended, or average deal size, for instance.
- Pricing strategy. Pricing is a key consideration when choosing the lead generation channels that best serve the company's objectives. You need to base a lead generation budget on the price of your goods and services.
Final Word
Although lead generation is a top objective for many marketers, 61% identify it as their greatest obstacle, according to HubSpot. The lead generation process can be made considerably simpler with the correct work with KPIs and metrics.
There is a variety of KPIs you can monitor to assess how lead generation performs in terms of marketing and revenue. The secret is to figure out what works for your company and stick with it. For the most efficient procedure, consider the key metrics listed above and our recommendations on selecting the best ones for your company.
About the Author
Kate Parish is the chief marketing officer at Onilab, a Magento development agency. Kate is constantly exploring the topics of SEO, branding, SMM, PPC, and Magento PWA development.
