Lead Generation By Traffic Segment and ROI Analysis

Lead Generation and Cost Analysis
Lead Generation is the center the Internet Marketing for many businesses that are not pure eCommerce, where businesses need to touch upon the lead, nurture and massage them for closing. Before availability of advanced web analytics, they said  – marketers always knew 50% of their budget was not working, they just did not know which 50% was not working. Well, that brings us to the ROI Analysis of Web Traffic for Lead Generation.

Using SEO and Blog for Lead Generation
Content is at the heart of lead generation today. In the post Panda and Penguin world, nothing beats valuable and unique content, and Search Engines are truly better than ever to identify and reward the unique content. So businesses relying on lead generation are using content to its full advantage. Applying Search Engine Optimization throughout the site is absolutely paramount, and what’s better than maintaining an active blog for content generation and marketing.

Using PPC for Lead Generation
AdWords and AdCenter and obvious sources of lead generation, especially in the ramp-up period when SEO and Content Marketing is still kicking-in. Here, ROI measurement is critical in this case, because every click on the ad costs money. PPC is not free, and is even more expensive for lazy marketers while the most expensive for foolish marketers.

Other Sources of Lead
Similar to SEO, PPC, Leads also might come in from the business’s Social Media Campaigns, Direct Email Campaigns, Drip Campaigns (also called Lead Nurturing Campaigns), and other sources. Within the paid campaigns, there might be paid banner programs, re-marketing campaigns, or even “cool” lead sources such as Webinars.

Measurement of ROI
Now, we come to the cost aspect of the Lead Generation, where we need to look at the overall picture to analyze the ROI by Traffic Segment. Just because the email list the business utilized brought in the highest number of traffic does not mean it is the best source of buying web visitors as they may have lower closing ratio. Pretty much all businesses struggle here to bring in highest quality BUYING traffic with the least amount to marketing dollars. The answer to this question is in Lead Generation Analysis by Traffic Segment for full ROI.

Biggest Challenge Is Data
After the understanding of traffic, conversion and cost, the biggest hurdle that prevents most businesses to calculate true ROI is their lack of system integration between their lead generation software, web analytics software such as Google Analytics, CRM, and accounting software. So excel is the marketer’s friend and if you are in this industry VLOOKUP, and Pivot Tables become your best friends pretty soon. Regardless, let’s take a look at the following view from excel, which can be built easily once the analyst has a chance to align traffic, cost and revenue data by various channels.

Lead Generation ROI Analyis By Traffic Segement

ROI Analysis
Finally, this enables an marketer to have a full view on ROI calculation. In the basic model above, since we know total unique visits, total unique leads as well as corresponding cost and Revenue data, the Analysis portion would quickly display average cost per lead per month for all paid channels, overall cost of leads by paid or organic. Obviously, this can be further expanded in paid sources such as AdWords, AdCenter, Paid Banners. Even better add a column and summarize for entire year.

KPIs in play:
This enables small business owners to compare Cost per Visit by channel and Cost per Lead. In addition, it offers number of leads required to make  a sale, that is the conversion ratio or in simple terms, the quality of traffic. Finally, by channel, now the business can analyze ROI by Traffic Channel on total marketing dollar spent.

Benchmarks and Takeaways
Cost per visit and Cost per lead varies widely on the type of industry. Conversion ratio is normally around 2-5% in about 60% of online businesses. Only about 5% of would probably have more than 5% Conversation Ratio, based upon my experience. The final takeaway is obviously to move your dollar amount to the channel which works best, not only from traffic perspective but also from revenue perspective.

 

 

About Ujjwal Bhattarai

Ujjwal is an engineer by education, a programmer by hobby, and an internet marketer by choice. Other than 1 minute chess, and biking, his passion includes SEO, SEM/PPC, CRO, and Web Development. As a lifelong student of Internet Development, he is hopelessly addicted to Internet, and sincerely believes after fire, wheel, and decimal point, internet is the fourth most important invention in the human history. Catch up with him on Twitter at @uj2wal or at his Google+ .

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