As the lead generation process has become more complex, so have the metrics used to measure campaign performance. To properly assess the success of a demand generation campaign, marketers need to take into account a number of different factors.
Here are some of the most important demand generation metrics to keep track of:
1. Lead Volume
Lead volume is the first and most essential metric to track when monitoring demand generation. Lead volume measures the total number of leads generated by a campaign. This metric is important because it provides a high-level overview of how successful a campaign has been in terms of generating new leads.
Not every company will need the same volume of qualified leads, so it’s important to benchmark your lead volume against your company’s specific goals. For example, a SaaS company that sells expensive software products to a niche market may only need a few hundred leads per month to reach its sales goals. On the other hand, a company that sells low-cost products to a mass market may need tens of thousands of leads per month to hit its targets.
To determine how well your lead generation efforts are performing, track your lead volume on a monthly basis and compare it to your company’s goals. If you’re not generating enough leads, consider increasing your marketing budget or revamping your lead generation strategy.
2. Lead Quality
Lead quality is another important metric to track when measuring demand generation performance. Lead quality measures the proportion of leads that are truly interested in your products or services. A lead is only considered to be “quality” if it meets your company’s specific definition of a good customer.
For example, a lead may be classified as “quality” if they meet the following criteria:
- They are employed in the target industry
- They have a specific job title
- They are located in the target country
- They have expressed interest in your products or services
To assess lead quality, consider using a lead scoring system. Lead scoring assigns a numeric value to each lead, based on their likelihood of becoming a paying customer. The criteria used to score leads will vary from company to company, but should be based on your company’s definition of a good customer.
Lead scoring can be used to prioritize leads, so that sales teams can focus their efforts on the most promising prospects. It can also be used to segment leads, so that they can be marketed to in different ways. For example, leads with a high score may be sent more personalized communications, while leads with a low score may be sent generic lead nurturing emails.
3. Cost per Lead
Cost per lead (CPL) measures how much it costs to generate a single lead. This metric is important because it allows you to assess the efficiency of your lead generation efforts. To calculate CPL, simply divide your total marketing costs by the number of leads generated.
CPL is a useful metric for benchmarking and comparing different lead generation campaigns. For example, if you’re running two lead gen campaigns and one has a CPL of $10 while the other has a CPL of $100, it’s pretty clear that the first campaign is more efficient (given that all other things are equal).
4. Conversion Rate
A conversion rate measures the percentage of leads that are converted into paying customers. This metric is important because it allows you to assess the effectiveness of your lead generation efforts. To calculate the conversion rate, simply divide the number of leads that are converted into paying customers by the total number of leads generated.
Conversion rates are helpful for benchmarking and comparing different lead generation campaigns. To improve conversion rates, there are a few things you could do:
- Create engaging copy and blog posts for your website
- Develop lead nurturing emails to send to leads who haven’t converted
- Invest in targeted paid advertising
- Improve your website’s UX, including page speed, web design, and readability.
5. Customer Acquisition Cost
Customer acquisition cost (CAC) measures how much it costs to acquire a new customer. This metric is important because it allows you to assess the efficiency of your customer acquisition efforts.
To calculate CAC, simply divide your total marketing and sales costs by the number of new customers acquired.
CAC is one of the most essential metrics for startups and small businesses, as it allows them to track the efficiency of their customer acquisition efforts. CAC should be monitored closely, as it can significantly impact a company’s profitability.
To reduce CAC, consider investing in more efficient marketing and sales strategies, such as content marketing or inbound marketing (e.g., SEO or social media). You could also focus on reducing your customer churn rate, as this would reduce the need to constantly acquire new customers.
There are a number of important demand generation metrics that you should track, depending on your business goals. The most important metric and how you track it will vary from company to company, but should be based on your company’s definition of a good customer and the quantity you need to achieve business success.