When comparing different marketing activities you have to know the amount of money it costs to acquire that customer.
This involves 3 simple calculations
- Cost of the activity – cost of placing the advert, networking etc.
- Your conversion rates
- Cost per sale / Cost per acquisition (CPA)
The cost of generating one customer is called your cost per acquisition (CPA) or cost per sale.
Comparing the number of leads you’ve received from all the sources and how many you closed helps you see which lead sources you should invest more money into, and which ones you need to stop doing.
Cost of the activity
There are different ways of marketing your business and each costs money – whether that’s a direct cost, such as paid for advertising or time spent, such as networking.
Direct costs can be easy to calculate – Time can be calculated at an hourly rate.
Most businesses undertake a mixture of activities to generate leads
What are your Conversion Rates?
Calculating your conversion rate for each of your different marketing activities allows you to see which lead sources convert the best, thus allowing you to focus your attention on that particular activity.
|Conversion Ratio =||Leads closed
Where to find clients?
There are many activities that generate leads for your business including email marketing, direct mail, cost per click advertising, telephone canvassing plus many more. For our example I have chosen 3 different activities.
Let’s compare 3 different scenarios:
Directory Advertising: You spend £500 to advertise in the local directory, generating 10 quote opportunities; from this you close 2 sales.
Cost per lead is £50 – Your conversion rate is 20% – Your CPA is £250
Email campaign: You spend £250 on a targeted prospect list. From the emailing activity you generate 10 quote opportunities; from this you close 2 sales.
Your cost per lead is £25 – Your conversion rate is 20% – Your CPA is £125
Networking: £500 spent on networking (25 hours at £20 per hour), this generates 20 quote opportunities; from this you close 3 sales.
Your cost per lead is £25 – Your conversion rate is 15% – Your CPA is £133.
Being able to compare the different ways of generating leads, the conversion rates and the cost per acquisition helps to work out which marketing activity is generating the most enquiries and which lead sources are converting the best.
Do you have enough leads to reach your Sales Targets?
Look at the figures and see how many sales you need to close per week. For example if you need to close 3 deals per weeks.
If your average conversion rate is 15% this means you need to be doing enough marketing activity to generate 20 quotes per week.
Looking at the above activity, finding clients and generating leads by Directory Advertising is more expensive than finding clients Networking or conducting an Email campaign.
How do I get clients?
We solve the problem of finding new clients by providing accurate and targeted prospect lists that match your customers helping you to gain new customers.
Whether you want to approach your prospects by mail, telephone, email or Text broadcasting we can provide the right list for you.
Unsure who your best customers are? No problem, we can profile your customer database and identify prospects that match your best customers.
If you already have a customer database then we can exclude these records and only provide you with new records.
If you are waning an Email & Telephone follow up campaign then use Telemail call 01274 483936 for more info