Are You Using These Key Lead Gen Metrics?

Kasra Dash: So what metrics do you measure when it comes to lead generation success? Let’s say you’ve been working with multiple lead generation companies and you’re trying to figure out which one performs the best. James Dooley: The only metric you should care about is return on investment. Profit is the metric. It should be as simple as profit and loss. Too many people obsess over cost per lead instead of cost per conversion. You then need cost per conversion versus the profit you make. If I convert a small £4,000 conservatory and make £1,000, that’s fine. If I convert a £15,000 conservatory and make £6,000, that’s worth far more. It’s not just cost per acquisition on its own. If you pay £400 per lead and only make £400, you break even. If you make £2,000, it’s good business. Know your KPIs. Know your conversion rate. Most niches convert at about 10 percent from lead to job. If a lead costs £50 and your conversion rate is 10 percent, your cost per acquisition is £500. If you make more than £500, it may be worth it. If you only make £600 or £700, maybe not. Know your numbers. Return on investment is the main number. Kasra Dash: We speak to loads of business owners who don’t understand how vanity metrics work. They look at cost per click or cost per view. You can buy a million views and get zero enquiries. The key metrics are ROI and cost of acquisition. Is it £50, £300, £1,000? If it costs £1,000, fine, but are you making profit? If you sell a conservatory for £13,000, you should be making profit even with a £1,000 acquisition cost. James Dooley: The examples I gave were service-based with instant money coming in. Another caveat is average transactional value and lifetime value. You mentioned it’s not only about per lead. Lifetime value matters. You might pay £20 for a newsletter subscriber because you know the average lifetime value is £200. That’s good business. You’re still looking at ROI, but this time over the long term. Different metrics exist. Lifetime value. Average transactional value. Cost per acquisition. If you know your metrics, you can work backwards. Cost per lead helps only when you know the rest. Then you can look at cost per click on PPC or impressions if you know how impressions turn into clicks, then subscribers, then customers. It’s all about knowing your numbers. Most business owners don’t know their numbers. They come to us blindly wanting lead generation. You need to know your KPIs. It’s the most important part of business success. Kasra Dash: A great example of businesses that understand their numbers is mechanics. In the UK you need an MOT each year. It costs £30 to £40. Mechanics don’t make any profit on that. They might make £1. They’re betting that when you arrive you’ll need brakes, tyres or a service. That’s where they make money. Many businesses use a loss leader knowing the lifetime value is maybe £600. If they give away £1, they’re happy because they earn £500 back. James Dooley: Metrics matter. If you’re comparing lead generation companies, look at ROI. Not clicks. Not impressions. If you want a lead generation company that removes the risk, head over to FatRank.com. We run a no win, no fee lead generation service if you qualify. You don’t pay for leads. You don’t pay for SEO, PPC, content marketing, outbound or inbound. You only pay on converted jobs. We handle the metrics because we know our numbers. We make sure you convert, respond fast, have testimonials and case studies. If you’re good at converting leads, we earn a commission on the jobs you close. Fill in the form on FatRank.com and see if you qualify.