According to HubSpot research, the two biggest marketing challenges that companies face are generating traffic, leads and proving the ROI of their marketing efforts.
The challenge behind creating a consistent flow of leads is made more difficult if you’re not paying attention to important metrics — the source of those leads, the conversion rate, the value per lead, and so forth.
To improve — heck, to know if you’re succeeding or not — you’ve got to understand your lead-gen metrics.
And in this article, we’re going to explain the 11 most important ones. But before we do that, let’s talk about the importance of mapping out your lead-gen sales funnel.
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Mapping Out Your Lead-Gen Sales Funnel
Before we can talk about which lead-gen metrics are critical to track for your business, it’s important to map out your sales funnel.
Doing so will give you a better idea of the critical decisions — the micro decisions — a visitor has to make in order to become a lead.
To be clear, your lead-gen sales funnel is just the steps someone takes toward conversion, the ad they click on, the pages they visit, and the offer they’re made.
Mapping out your sales funnel will look something like this…
Try it out yourself.
What’s the traffic source for your lead-gen sales funnel? That’s the first step. Which page do they visit first? That’s the next step. What happens if they click-through on the first page? That’s step three. So on and so forth, all the way to the conversion event.
Some lead-gen sales funnels are really simple…
And some are more complicated…
Your lead-gen sales funnel might include a bribe to subscribe, a webinar, a free course, or something else.
Whatever the case, once you map it out, you’ll start to see all of the key points where visitors have to make decisions.
For example… will they click on your advertisement? Will they read the copy on your sales pages? Will they give you their contact information? Will they show up for the free training? Will they answer your phone call?
Those are the points where your marketing and sales efforts need to be at their best — and often, those are the places that need looking at if something isn’t working.
The following 11 lead-gen metrics will help you determine which key decision points are already performing well and which ones need more support.
1. Time On Page
How long does the average person spend on each page of your sales funnel?
Combined with your conversion rate and click-through rates, this metric will help you determine how engaged people are with your content, copy, and videos.
Of course, some of this will be speculation.
But here are some examples of insight you could garner from various scenarios…
- If the average time on-page is low but the conversion rate is high, then the page is doing a good job of converting people quickly.
- If the average time on-page is high but the conversion rate is low, then people are reading and considering, but they’re not being persuaded.
- If the average time on-page is low and the conversion rate is low, then something is probably wrong with the offer or how it’s presented.
The easiest way to track time on page is in Google Analytics — you can do this for sales pages as well as blog posts.
2. Click-Through Rate
Click-through rate refers to the percentage of people who click on a given CTA.
You can measure the click-through rate on your advertisements, your blog posts, your sales pages, and even your emails.
This metric will indicate how compelling your offer and sales copy is. A higher click-through rate is always better since it means more people are taking action.
For a sales funnel that requires multiple clicks to conversion, you can use click-through rate to determine where people are falling off in your sales funnel — during the initial opt-in, the upsell, or once they hit the checkout page, for instance.
The average click-through rate for most sales pages hovers around 2%, but that will vary greatly depending upon your industry, your offer, and the traffic you’re driving.
You can calculate the click-through rate using the following formula:
3. Conversion Rate
Conversion rate is the king of lead-gen metrics. This metric refers to the percentage of visitors who opt-in and become a lead within your sales funnel.
For obvious reasons, this is one of the most important metrics to track when it comes to generating leads for your business at an affordable rate.
With a low conversion rate, you’re paying for a lot of traffic that doesn’t convert. With a high conversion rate, the opposite is true — you’re paying for a lot of traffic that turns into leads… which means you’re paying less money per lead.
So long as the quality of those leads is up to par, a good conversion rate is equal to a good sales funnel. Don’t fix it if it ain’t broke!
If your conversion rate is worrisome, then figure out where people are falling off (using click-through rate) and either change your source of traffic, rework your sales copy, or try a different offer.
You can calculate the conversion rate using the following formula:
How much are you paying, on average, to generate a lead?
That’s what cost-per-lead is all about. And it’s an important metric to consider and compare to your budget, your value per lead, and your overall ROI.
Lead-gen costs typically include spending from ads, sponsorships, influencer collaborations, etc.
If you have a high value-per-lead — meaning your leads turn into customers at a healthy rate — then you might not mind paying more to acquire each lead.
But if your lead quality is low and your cost is high, then there’s a serious problem.
Try to balance your cost-per-lead and your value-per-lead so that you’re making more money than you spend.
You can calculate cost-per-lead using the following formula:
5. Value Per Lead
Value per lead is a little bit different. Whereas with cost-per-lead, we’re looking at how much each lead costs on average to generate, value per lead examines the average value of a lead for your business.
The formula for this is quite simple…
What you’re doing is taking the average lifetime customer value and multiplying that by the average conversion rate by which you turn leads into customers.
So if my business has an average lifetime customer value of $5,000 and I turn leads into customers at a 10% conversion rate, then my value per lead would be $500.
The metric will give you an idea of how much you can afford to spend on each lead and still remain profitable.
6. ROI Per Lead
ROI stands for return on investment. And it’s one of the most important metrics for marketers and entrepreneurs to pay attention to.
The goal of building a business, after all, is to make more money than you spend… to generate a profit.
And ensuring that your revenue outweighs your marketing costs is absolutely critical to growing your business.
Look at your cost-per-lead and your value-per-lead, then plug those numbers into the following formula…
That’ll tell you how much profit the business is making per lead that you generate — which is a great metric to show your boss 😉
7. Lead Source Quality & Quantity
When thinking about your lead-gen sales funnel, it’d be easy to focus exclusively on optimizing your offer and your sales copy.
But let’s not forget about where the traffic is coming from.
Not all traffic sources are equal, after all. Good marketing depends on driving the right people to the right offer.
If you’re driving the wrong people to the right offer, though, then your sales funnel is going to suffer.
So we recommend grouping all of the previously mentioned metrics into categories based on the source of the traffic. This will help you identify your most lucrative sources and also your most costly sources, which will then allow you to double down where it counts and cut spending where it doesn’t.
8. Lifetime Customer Value
Lifetime customer value refers to the average amount of money a customer spends with your business over the “lifetime” of their commitment.
Here’s the formula…
To determine customer value, you need to calculate the average purchase value for your business and then multiply that by the average number of purchases made over a year by a single customer.
Once you multiply that number by the average lifespan of a customer, you’ll know how much money the average person spends with your business.
This will inform how much you can afford to spend to generate leads.
9. Open Rate
Generating leads is all about collecting contact information from your target market.
But which contact information should you collect?
The most common way to generate leads — especially at the start of the customer journey — is by collecting email addresses.
Convincing people to give you their email address is relatively easy and email marketing is a super effective form of communication.
And one of the best ways to determine the effectiveness of your email marketing efforts (and thus your lead-gen efforts) — in addition to click-through rate — is the open rate.
This metric refers to the percentage of email subscribers that open your emails and indicates how engaged your subscribers are with your brand.
You can calculate the open rate with the following formula (but most email service providers will just do it for you):
10. Unsubscribe Rate
If you’re generating leads by collecting email addresses, then one of the biggest red flags that something has gone awry with your marketing efforts is a high unsubscribe rate.
The last thing you want, after all, is to pay for leads today and then have those leads unsubscribe from your email list tomorrow.
A high unsubscribe rate is a sign that you’re targeting the wrong people, your offer isn’t compelling, or your emails aren’t value-driven.
You can use the following formula to calculate your unsubscribe rate (but most email service providers will do this for you)…
11. Goal Setting
We’ve shown you 10 different mission-critical metrics to pay attention to when you’re trying to generate leads.
And you might be tempted to Google the averages for these metrics to see how you compare.
But slow down tiger…
The goal isn’t to be better than other businesses… it’s to improve upon your current lead-gen metrics.
Maybe your conversion rate is higher than your other marketer or entrepreneur friends… maybe it’s lower — that doesn’t matter.
What matters is improving your own metrics and always trying to get better.
Set goals, run tests, and track KPIs. Over time, you’ll improve your lead-gen metrics so that other people are looking at you. But first thing first.
There you have it.
Those are the 11 most important metrics to pay attention to for your lead-gen efforts — they’ll help you determine the effectiveness of your current efforts and know where to make critical adjustments if and when those adjustments are needed.
Knowledge is power.
And now, you’ve got the power.
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