This is the first in a series of three articles about key fundamental digital marketing analytics.
CPL -The Cost per Lead Formula is arguably the most important element with which you can measure the efficiency of your lead generation efforts. No doubt it is incredibly important.
Leading digital marketing resource, “Bright Orange Thread,” describes the formula in a simple fashion:
Marketing Spend / Total New Leads = Cost Per Lead (CPL)
For Marketing Spend, it’s important to add up the sum of your time, ad spend, and any third party expenses. Targeting is a key component in the cost you arrive at, but that is an article for another day and not in this series.
In a recent webinar, a senior executive from a long revered piano company on the east coast asked what our CPL was. Since we had been so busy with innovations and growth, I ballparked him high and conservative at $50 per. The provided graph was great news to the team here at PI when the figure turned out to be 38% lower at $30.97! Please note that this turnkey cost includes the cost to employ us as your lead generation provider.
I think the most gratifying part of this accomplishment on behalf of our clients is not that we are far below the national averages, but that we remain below the averages while marketing in an arena that does not enjoy universal appeal. Let’s be real, folks. Not everybody is a piano player. Yes, we are tapping into the entertainment world these days by selling technologically advanced instruments with player capabilities, but that doesn’t change this stark reality: ours is an arena made up of approximately 1% of the consuming public. Only a sliver of the population considers having a piano a necessity or a dream come true. The other categories on this chart have much more universal demand and we are outperforming ALL of those major categories!
For luxury marketing item leads to be provided at these costs is an unprecedented accomplishment. We owe a HUGE debt of gratitude to all the piano dealers on whose financial backs we’ve built and embellished our lead generation programs. By servicing them, we have become ardent problem solvers. We have also been good listeners and implemented many, many tweaks that continue to improve the quality of the leads and our clients’ conversion rates. As I say several times a day, “Our best ideas come from our consortium of customers.”
This leads me to an important point. It is our strong opinion that the overall health of the piano business is good for us all, colleagues and competitors alike. We all need piano interest to be alive and vibrant and we all need to continue creating ways to excite the buying public about pianos and, more importantly, the benefits they bring to our lives and the world at large. Although we only work with one digital client exclusively per market, we endeavor to be a catalyst to help the industry we love grow. We spend a lot of time thinking about and talking to sales professionals all over the globe who come up with creative ways to sell from the leads we provide. If you look at your CPL and establish a figure you are comfortable with, please compare it to what our clients are paying per lead and use it as a benchmark. It’s good to know where you are.
We will be providing two more articles in this series about fundamental lead generation analytics. They will be complete with comparative graphs as well. The next two will explore click through and conversion rates, both important numbers to know about yourself as well. In summary, we are elated to provide information to shine a light on what the real world costs of a lead should be. There are other important topics we will address as time goes on – Good Lord willing – the other two in this series (click through and conversion rates), innovations, and targeting. I will close for now with an invitation to have you call me if you want to talk shop. It’s what we do every day when we go to work.