Q&A: The True Cost of a Lead in a Data Centric World
We sat down with Greg Lifhits, Cronin’s Manager of SEO and Analytics Strategy, to discuss how data has changed direct response marketing and the definition and cost of a lead.
Traditionally, how have marketers measured a lead?
It’s different for offline and online tactics. For offline, marketers look at a lift in leads – which is pretty loosey goosey – or use call tracking which measures the physical calls from an offline piece. For online, at the highest level, leads are derived from conversion tracking where a piece of code tracks a prospect. The problem with code is there’s margin for error and it’s not physically tied to the actual lead. For example, you can have fifty form submits but don’t know who those people are. You don’t have their name or any information.
If this is all you’re doing, chances are you don’t know the true cost of a lead – or what tactics are really working for you. With form submissions, 30% duplicates is the industry standard, then layer on those that are unqualified, spam and other factors and suddenly a cost per lead of $60 could really be $400.
How do you determine the true cost of lead?
If you really want to know the true cost of a lead you need to assign a unique ID to every single lead and you need to clean your data as soon as you get it.
Assigning a unique ID is the bare minimum if you want to truly understand what’s working. You put the unique ID into your analytics platform and you know exactly where it came from and who it is. Everything today is digital – even offline – so there’s no reason you can’t be tracking and monitoring everything to some degree to provide insight into what’s working.
Cleaning data as you receive it is also a best bet – de-dupe, remove spam, clean up addresses and phone numbers, add in geo-targeting data etc. This way everything is ready for your next campaign.
Doing this is going to help you determine the cost of a lead and make you extremely efficient. The unique ID is going to pinpoint those tactics that work allowing you to focus your dollars where you have the greatest impact. Clean data is going to ensure you target only those who are your real prospects. Efficient and cost effective.
How often should you evaluate leads?
If you look at results quarterly or annually, it’s too late – you already spent the money. Real time analytics systems with machine learning collect data in real time and send out flags if needed. Even if you’re not looking at it in real time, the data is there. Typically we look at data monthly with our clients. Weekly doesn’t give enough of a picture; monthly reviews allow for trends, observations and nimble corrections.
Can you give us a real example where tracking has made a significant impact on a client campaign?
Here’s an example of how efficient we are working today and how a little digital flare works with the most traditional advertising tactic.
One of our clients historically always placed ads in the same 18 local newspapers no matter what the product or promotion. Last year we assigned a unique call tracking number to each paper. The campaign had two flights. During the first flight, we were able to determine which paper generated the most calls, de-duped leads and qualified leads based on length of call. As a result, we removed 10 papers from the second flight and cut the cost in half.
How has data been a game changer?
You can slice and dice data any which way. And it’s the totally minute details that matter a lot.
If you’re not tracking everything that’s possible to track – even if you just dump the data into a database temporarily – you’re doing yourself a big disservice. If you can’t do anything with the data right now, keep it for when you can. Without this information you can’t truly understand what your best marketing tactics are or know your cost per lead.
Thirty to 40 years ago, data was expensive so the mentality was to store as little as possible with as small a footprint as possible. Marketers followed that mantra for a long time and kept the minimum. Today, data is dirt cheap. I say store everything. Eventually delete what you don’t want and clean it up but there’s no such thing as running out of space anymore.
What else is Cronin doing to improve lead quality?
We’re investing in our infrastructure to ensure we have the right platforms in place to support massive amounts of data. We’ve established relationships with multiple data providers to give us the most comprehensive picture possible for any given audience target. We’re also establishing relationships with non-traditional lead enrichment providers that bring us even one step deeper; for example, leveraging Better Business Bureau data for B2B clients. And we have a proprietary model in development that can be calibrated for any particular client’s business (be it B2C of B2B). We’re excited to put it to use soon.