Companies that want to grow need to have effective lead generation campaigns. Companies that want to know how effective their lead generation campaigns are need to understand various lead generation metrics so they can adjust their campaigns to make them even more effective. Once they understand that they can increase leads based on measured values, they’ll be able to create better campaigns and boost their bottom line.
Cost Per Acquisition (CPA)
The CPA is a critical metric for any marketing campaign because it tells you how much you’re spending to get a lead and which channel is giving you the best return on investment (ROI). To calculate your CPA, divide the amount you have spent on the lead generation campaign by the number of leads you’ve acquired during a specific time (usually per month or per quarter). For example, if you have spent $2,000 on a quarterly lead generation campaign and you have acquired 100 customers during that quarter, your CPA would be $20. You want this number to be as low as possible.
Customer Lifetime Value (CLTV)
The customer lifetime value is necessary to project how much revenue your company will be generating per customer in the future. You will eventually base many of your business decisions on this number and if you don’t know how much revenue each customer will generate, you won’t be able to make very solid decisions. Calculate the CLTV by multiplying the average total purchase amount by the average number of purchases per year by your retention rate. The higher the value is, the better your lead generation campaigns are working.
Average Revenue Per Customer (ARPC)
Companies need to know how much revenue each customer is bringing in during a given year (or other time frame). This metric will tell you how your company is performing on a per-customer basis compared with other years. Again, the higher the value, the better your lead campaigns are working. To calculate the ARPC, divide your total revenue by your total number of customers. There are two ways this number can increase: by turning more leads into customers or by increasing the price of your product or service.
Website Traffic
Many businesses rely on organic lead generation which comes from visitors who find their website on their own. Other companies spend marketing money on driving traffic to their websites through pay-per-click strategies and other advertising methods. Either way, you need to know how much traffic is coming into your website and where it’s coming from. Not only will this metric help you identify who your customers are, but it will also inform you on which lead generation activities are most effective so you can establish your marketing budget and develop more targeted campaigns.
Click-through-rate (CTR) is a website traffic metric that can tell you how well your calls to action are performing because it measures how many visitors see your ad and actually click through to your website. Bounce rate can tell you how many people land on one of your website pages and leave before visiting other pages. You want a high click-through-rate and a low bounce rate.
Conclusion
While there are several other metrics that can help you increase your leads, these four can give you valuable insights into your lead generation campaign effectiveness. Don’t let another day go by without knowing these all-important metrics and how they impact your business decisions.
