A lead is someone who has an interest in what you sell. They have sent you their information to find out more. They may have downloaded a content upgrade or other lead magnet, or they may have just filled out your form on their own in your sidebar. However they did it, they’ve expressed interest and now they are your lead.
Even though you’re providing a form, a freebie, a lead magnet, content on your site, content on social media that is free to them, it does cost you something. #EventPreneur #KnowYourNumbers #CostPerLead Click To Tweet
Even though you’re providing a form, a freebie, a lead magnet, content on your site, content on social media that is free to them, it does cost you something. Cost per lead is figured into your cost for customer acquisition, but the number on its own is important too. Total marketing costs consist of all those things you give away free, plus any actual paid ads, and whether you pay affiliates for leads or not.
The formula to figure out your cost per lead is:
Total Marketing Costs / Total New Leads = Cost Per Lead
Remember that marketing consists of all the things mentioned above. You don’t even have to spend real money on it, just your time. Put a dollar value on your time so that you know how much it’s costing you to get each lead. When you realize how much you’re already spending, you might decide it is worth it to pay an affiliate to help you get more leads and let them do more of the work for you.
It’s important to know these numbers because it helps you understand how much you can and should spend on advertisements, how much time you should invest, and how much you should pay your affiliates. One calculation that will also help is knowing how long it takes a lead to become a customer. When you have that number, you can make the data sing to you and give you a lot of help in choosing how to proceed turning them into a customer.
Another issue that you will need to address when it comes to your cost per lead is whether your leads are quality leads or not. If you’re not qualifying your leads, then you’re probably wasting a lot of money getting leads that will never convert to buyers. The way to do that is to totally understand who your ideal audience member is, get that audience persona absolutely on point, and you won’t get a lot of leads that are inaccurate.
Getting a lead for the sake of it is not effective. Be sure that your marketing for lead acquisition makes sense to your overall goals. Getting 1000 leads in a day means nothing if they aren’t targeted leads that are likely to buy. So, don’t get too excited about acquisition. Instead, get excited about targeting and narrowing down your target to the very minutia that you need to make them most likely to become customers someday. Then the cost will be worth it.