by Catherine Brown, President, Initial Call
Given that sales is my business, it may be particularly ironic that I dislike the word “lead” so much, but has there been another word in the world of sales lingo that’s caused so much confusion? For the purposes of this article, I’m defining a lead as a viable person/company who has expressed interest in learning more about your solution. Leads that are just names about which you know little information aren’t leads; they are suspects.
So, what is the cost of a lead? During 2011, our clients’ cost of a lead-- in these cases both pre-arranged phone appointments and face-to-face meetings –cost between $250 and $4800 each. How is this possible? At a run rate of $100 per hour for the labor to generate these meetings, some clients’ meetings could be scheduled every 2.5 hours of work, while other clients (those with complex services and difficult, large target accounts to penetrate) see a meeting every 40-50 man hours of work. When we wrote about this topic in early 2010, we reported that we were seeing a range of qualified leads cost clients between $800 and $3000 each; I ascribe the broader range during 2011 to the diversity of the client industries we’ve served over the last year. The fact remains that all sales processes are not equal: some things are much easier to sell than others. Selling a low-cost item to an individual for less than $1000 per year is not as difficult as selling consulting services around a specific technology.
How do you know what your lead costs should be? There are industry benchmarks that we can share with you. Email us at sales@initialcall.com with specific questions and we’ll share what we’ve learned. Another way to do some research is to read our most recent client story on work we did last year for an Oklahoma City-based venture advisory firm, i2E, and their clients. This client story shares 4 quick examples of different projects, whose lead costs varied widely, based on what and to whom they were selling.
Be sure to consider your total costs when evaluating which sales programs are working. While cold calling may seem expensive to you, lead generation work through Internet marketing, direct mail campaigns, trade shows, and networking all cost money too, so be vigilant in capturing true costs when you assess the expense of acquiring your qualified leads.
(See our previous article by Amy Keuper, The Real Cost of a Lead.)
Posted on
Thu, January 12, 2012
by Catherine Brown
filed under