How much is a referral lead worth to you? If your answer is “Don’t Know,” add yourself to the majority of marketers who gave the same answer in a recent HubSpot poll.
During HubSpot’s webinar about the power of customer evangelism , we asked attendees how much a lead was worth to them. Though we offered a broad range of answer choices—from $100 per lead to more than $10,000 per lead—the majority of respondents said they weren’t sure about the value of their leads. With surprise, we found out that 40 out of the 102 respondents “didn’t know.”
It turns out these results aren’t that surprising. In a June survey, EXHIBITOR magazine found out that “ only 47% of companies track leads generated at trade shows and events throughout the sales cycle .” The survey results also showed that the overwhelming majority of companies don’t measure lead-to-customer conversion rates as part of their ROI reports.
Why is not tracking lead value problematic?
The fastest path to failure is to quit assigning real value to metrics. If the value of a lead is unknown, you won’t be investing in lead generation. No budget is allocated to initiatives whose performance is untrackable. This, in turn, can result in lower marketing performance and slow down the sales cycle.
If you are unsure about your cost per lead, consider reading HubSpot's 2010 State of Inbound Marketing report . That will give you an idea of how much inbound marketing can save you in terms of lead generation. As a reminder, businesses that invest in inbound marketing achieve 60% lower cost per lead than businesses spending on outbound channels.
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Magdalena Georgieva 3:13 PM on September 14, 2010
Thanks for the comment, Shawn! Building reliable metrics help marketers track performance and prove to their organizations that certain investments are worth the effort and money. It will be increasingly difficult to ask for budget unless you provide some ROI reports, no? That is all I was trying to convey--and assigning value to the cost per lead is a good place to start.
phil melnik 3:32 PM on September 14, 2010
Thanks for the survey and link to the Exhibitor Magazine article. I'm not sure which is worse,"only 47% track leads through the cycle" or "less than 70 percent have any formalized plan or process in place for how those leads are followed up after the show."
Bob McCarthy 3:33 PM on September 14, 2010
What isn’t mentioned here – and apparently was not part of the poll – is how you define a lead.
The value of a lead, even for the same company, is going to vary widely depending on your definition.
A lead that results from someone dropping a business card into a fishbowl at a trade show is worth very little.
A lead that results from a direct mail campaign that offers a free white paper is going to be worth more.
A lead that results from a search engine inquiry looking for price information is going to be worth even more.
A lead that results from a personal referral requesting a face-to-face meeting is going to be worth a lot.
Only when you make these distinctions should you even consider placing a dollar value on your leads
Amy Taggart 3:53 PM on September 14, 2010
Lead definition is a key part of the process, no doubt, as well as consensus between Marketing and Sales on the definition.
Speaking for myself - I can't get to the value of a lead because I don't currently have a CRM system in place that will allow me to consistently track a lead all the way through the close. I think that has to be a fundamental number that Marketing has in its pocket before it can calculate the value of a lead.
Ralph 9:34 PM on September 14, 2010
How would you work out a lead value? Aveage it out? A customer for us could be worth anywhere between $2000 - $400,000 but we might have to sift through a 1000 leads to find a $400k customer, making it's lead value only $400...
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