Analysts use all sorts of metrics to track the efficacy of their marketing campaigns. But some are more effective than others. For example, cost per lead is one measurement that your team should always be tracking.
Whether you buy leads, buy email lists, or find them on your own, tracking your cost per lead is important. Keep reading to learn why that’s the case and to see what a good cost per lead is for an analyst.
What Is A Cost Per Lead And Why Does It Matter?
Cost per lead (CPL) is a very simple concept. It’s the average amount of money that you spend to find a new prospect. The metric is worth using because of how easy it is to compare the efficacy of each of your marketing campaigns with a single number.
That means you can use CPL to quickly identify which of your strategies are working well and which need further attention. Having this capability will help you determine where your limited marketing dollars are best spent. This is why an analyst who tracks their cost per lead is often better equipped to succeed in business than one who doesn’t.
What’s A Good Cost Per Lead For Analysts?
Now you know what cost per lead measures, but you still need to figure out the CPL range that you should be targeting. Otherwise, you won’t know whether you’re succeeding in this area or falling behind.
There isn’t a single CPL measurement that every analyst should shoot for. Rather, your ideal range will depend on the unique nature of your business.
Whether you buy leads, buy email lists, or find them yourself, there’s one key thing that you need to know when figuring out what a good cost per lead looks like. Companies need to spend less on their average lead than the lifetime value of their average customer.
For example, imagine it costs you an average of $10 to generate a new lead. The lifetime value of that new customer needs to exceed $10 for you to have made any money on them. But that doesn’t include any of your other costs, such as employee salaries, technology, and benefits. These also need to be accounted for while figuring out the CPL range that works for your company.
Average Cost Per Lead By Industry
If you’re new to the CPL metric, it can be worth considering what’s average for other industries. This can give you a better understanding of where your company may need to shake out to ensure its profitability. Here’s a quick list for your comparison:
- Travel and tourism – $106
- Telecom – $45
- Retail – $34
- Non-profit – $31
- Media – $108
- Marketing – $99
- IT – $208
- Industrial – $136
How To Calculate Your Cost Per Lead
You only need two numbers to come up with your cost per lead: the amount you spent on marketing and your total number of new leads. Once you have these two values, simply divide your marketing costs by the total number of new leads you have.
There are lots of ways to customize this calculation to get what you want out of it. For example, you can vary the time intervals that you look at to see how you’ve done over a specific duration. Or you can zero in on specific marketing campaigns by only using the amount that you spent on that campaign and the leads that you got from it in your calculations.
Analysts can play around with CPL calculations like this to gain further insight into how specific aspects of their marketing plans are working. Doing so is a great way to figure out the best ways to spend your marketing budget moving forward. It can also tell you whether or not certain campaigns need to be altered before they can achieve the goals that you have for them.
Strategies For Analysts Looking To Reduce Their Cost Per Lead
It goes without saying that the lower your cost per lead is the better. In an ideal world, an analyst would generate thousands of new leads at virtually no cost. Of course, this doesn’t happen often. But analysts should still strive to bring their marketing costs down while also increasing the number of leads that they get from each campaign.
Achieving that is typically easier said than done. But here are some strategies you can begin using to improve your CPL.
Ensure that your ads and landing pages match
It’s important to make sure that your website visitors’ expectations are satisfied when they click on one of your ads. If they aren’t, the visitor will quickly look for another webpage that will provide them with what they’re after.
For example, you might have an ad on Google targeting the key phrase “how to raise stock price.” If an internet user clicks on this ad, they should be taken to a landing page that answers the question. It shouldn’t link directly to your homepage.
Rather, you’d want to link to a landing page that shows how your company can help prospects raise their stock price. Doing this will make it much more likely that the visitor stays on your site instead of navigating elsewhere.
A/B test your ads
There are lots of variables that can influence the overall effectiveness of your ads. Everything, from the image you use to your copy, could make a user more or less likely to click on your links. That’s why it can sometimes be useful to compare the performance of two ads that target the same thing.
This is a process called A/B testing. It’s a great way to figure out what’s working in your ads and what could be improved to give you better results.
Update your SEO targets regularly
Just because an SEO target worked for you in the past doesn’t mean that it will continue working for you in the future. That’s why it’s crucial to regularly go into your SEO target list and reassess the performance of each keyword. You can move away from SEO targets that aren’t meeting your CPL expectations and reinvest that money into keywords that are.
Retarget site visitors based on behavior
The more targeted your ads are, the more likely they are to achieve your desired outcome. One way to do this is by retargeting your website visitors based on how they interacted with your site in the past.
Website analytics tools allow you to track user behavior on your site. You can analyze which pages certain users went to and then send out highly targeted ads that re-engage them on a topic they’ve already shown interest in.
Should You Buy Leads To Lower Your CPL?
Finding new prospects can be challenging. If you’ve struggled in this area, you might be interested in buying leads. For example, you might think that if you buy an email list, you would quickly gain a large number of new leads without having to fiddle with your marketing campaigns.
Buying leads may or may not be worth it for you. It depends on how much the leads cost and how valuable they are. But you should keep in mind that you won’t usually get exclusive access to any leads you purchase. Rather, you’ll be competing for their business with other analysts who have access to the same email and lead lists that you do.
Generally, it’s a better idea to build out your own marketing capabilities so that you can generate new leads that are entirely your own. But it may be worth it to purchase lead lists to give you a sudden influx if you’re running dry. You’ll just have to figure out the total cost you’re paying for each lead and how much value you expect to get from them.
Get More Out Of Your Marketing Budget With LeadLander
The key to improving your cost per lead as an analyst is getting more out of your marketing budget. If you spend less to find new prospects, you’ll make more on each one you convert into a paying customer.
That’s why services like LeadLander are valuable. Our platform will help you optimize both your inbound and outbound marketing efforts. It makes it easy to identify new leads, validate interest from sales outreach, and improve the accuracy of your pipeline.
With LeadLander, you won’t pay any per-user fees or have to deal with confusing ad-hoc pricing. Instead, your whole team will be able to benefit from the data we provide so that you can get the most bang for your buck.
But you don’t have to simply take our word for it. We’re putting our money where our mouth is. You can sign up for a free 14-day trial of LeadLander by visiting our website.