Scale efficiently by assessing your cost of leads

Assessing your cost of leads reveals information about the scalability of your business, also making it more predictable.

Since every customer has started as a lead, the number of leads you can generate in a period of time and how much you pay on average for these leads demonstrate the scalability of your business. Observing cost per lead for each sales and marketing channel provides you with information on how you can optimally scale your business. Let’s see how you can retrieve this information in three steps.

First, you classify your leads. An example would be “outbound direct mailing campaign”. More general but common lead classifications would be raw, referral, marketing, sales, marketing qualified and sales qualified leads.

Second, you allocate the human and financial resources spent to generate a set or single specific leads before calculating the cost for each classified lead.

Third, you track your classified leads until the end of your sales funnel so that you reflect the lead quality stated as conversion rate. It allows you to calculate the share of customer acquisition costs spent on leads.

Tracking and retrieving the information above will demonstrate the scalability of your business for yourself, your team and investors. Further, it enables you to allocate your resources in a more efficient way and quickly see the impact of any change in your marketing and sales efforts.