What’s the cost of a lead ?

The advantage of outsourcing lead generation is that the calculation of the costs per lead is not very difficult. Basically you sum up all the costs linked to your campaign and you divide this by the number of leads. We can discuss the definition of a lead, but the best methodology is to consider only sales accepted leads in your calculation. What you do need to take into account, when outsourcing the lead generation process, is that afterwards you will need time to evaluate the feedback. Finally the leads are going to the sales team so they should be involved in the process to validate the lead which takes some time as well.

The costs per lead analysis is more difficult when people are on the payroll because then you also have to identify every hidden cost such as: recruiting, training, firing, sickness, infrastructure, helpdesk, electricity, telecom, internet, security, building, car park, group insurance,… An internal sales department is very often considered a high cost center.

One of our biggest customers, a big ERP player, made the calculation 8 years ago – before working with us – and found that the internal costs per lead was more than € 3.000! To have a clear insight in the costs per lead, outsourcing can be very interesting.

Let’s say you spent € 10.000 on a campaign and you have generated 25 leads. Then your costs are € 400 per lead. For the calculation, you have to enter the leads in the CRM, so that you can link a campaign to a budget and to a result.

It can be difficult when different campaigns have common leads, but in the CRM you are now able to identify the leads that already exist. The next challenge is to centralize and coordinate the campaigns and maybe also the partners. Let’s say, you have 10.000 potential companies in Benelux for storage capacity. You have a budget to do 20.000 interviews per year. In that case you want to be sure you call each company not more than twice a year instead of calling the same 2.000 companies 10 times a year!

When you manage partners and distribute co-marketing budget you cannot be sure who they are going to call. The damages can be very serious if potential customers are getting bored with your calls. I also noticed that if you call too much you look a bit desperate and prospects then expect good discount the next time they will buy anything from you. And don’t forget the potential conflicts about lead ownership in your channel.

Through our database expertise and our tools (CLM and CPWeb) we help our customers to centralize their acquisition activities. We can decrease the global calling budget because we call the same company not more than two times per year and by increasing the number of companies in the scope we can drastically decrease the costs per lead. Do not hesitate to contact us if you want to learn more about my calculation.