Thursday, March 20, 2008

Cost per lead is irrelevant...

Do you establish a marketing budget for the year and increase it or decrease it the next year based on the performance of the business?

While spending tens of thousands of dollars on trade shows, workshops and marketing campaigns, companies almost never close the loop to determine the effectiveness of marketing outreach efforts.
They have no information regarding how many leads the program provided, how many of those leads turned into customers, and how much revenue was generated from that customer that they may have closed. As such, ROI from costly and significant marketing expenditures cannot be determined.

The truth is that sales people care very little about the cost of the leads marketing generates. What they really care about is how many of those leads will actually become viable sales opportunities. Cost-per-lead measurements are irrelevant unless we can answer another fundamental question first, “What is our rate of lead acceptance into the sales pipeline” and then “What is the cost per opportunity?”

Sadly, a lot of marketers tend focus on cost-per-lead because they really don’t know what happens to their leads after they hand them off to their sales teamWhile a strong vice-president, Marketing Director, or CEO should be paying close attention to these data, without a CRM (customer relationship management) solution and the appropriate reporting it becomes an impossible task. The result: instead of using vital and often limited funds to drive additional business from profitable marketing programs, companies just continue with business as usual repeating the same programs without measurement of success.

B2B Marketers must start measuring cost-per-opportunity now! It’s the one metric that can help you understand how well your sales team accepts and pursues leads. Ultimately, it shows if your leads are actually helping your sales team sell and if we’re positively contributing to their pipeline.

A CRM solution can help address such issues by deploying a structure that allows control. Ultimately such functions ensure that these corporate practices are part of a better sales and marketing behavior.

More on SALES PROCESS ENGINEERING & CRM ...

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