If You Can’t Measure It, You Can’t Manage It ( lead generation part 2)
The best companies are the one’s that take the art of business and try to make it a science, and data is the key ingredient in science, so building a great lead generation system (leadgen) starts with measuring or counting. Sounds simple but depending on how many leadgen channels you are running, measuring it can be tedious.
At the companies I own, our leadgen involves many sources:
- direct mail
- google display
- email marketing
- trade advertising
- traditional sales people
- reference selling
- and many more
Before any of these leadgen methods were implemented, I had to ensure that we could track how a client came to us. It isn’t the hardest part of leadgen but it is the first step. If You Can’t Measure It, You Can’t Manage It.
What does it cost to get a client and how much do you make
More specifically, if you can’t tell how your client came to you then you can’t figure out if that advertising method is working nor can you work on improving it. Worse, you can’t figure out the most important part of a business, what does it cost to acquire a client AND how much money do you make from each client. It isn’t just about counting clients but also prospects that didn’t convert so you can make improvements.
At the end of every single month I anxiously count and record where visitors, prospects, and clients come from, and from what lead source. In 99.9% of the time, I know exactly where the lead came from because I made sure to have some type of tracking mechanism in our leadgen channel. I then add all of this up to determine our true cost for each campaign
A business owner can stay really close to his/her business
I then look to determine how much money we made from that client but we often have to make some assumptions in this area because we often don’t always know how long a client will stay with us. In the end, another key to all this work is that I often stay extremely close to our businesses helping us in all our marketing and sales efforts. As much as I want our leadgen to be a science, it often switches back to art, which is very subjective.
There have been times when a lead source got us a client but that client wasn’t as profitable as other lead sources because they didn’t use our service as much as others. Every day, week and month I am anxiously measuring leads coming into our crm system to see if that new advertising channel is working. I have always known that the key to my business is finding the leadgen channels that are profitable, and it is why Leadgen has always been super important to me. I know that the work I am doing can determine the success or failure of my business.
I thought I had that magic leadgen bullet
One of the problems in any business that wants to grow bigger is that our competitors are not standing still. Your competitors are also looking for the best leadgen methods so the field is always changing. In one of the businesses I started our first leadgen was google paid for search (sem) and for the first 6 months we thought we had struck gold. We could turn on google sem and we could get more low-cost clients then we could handle, but then our competition found the same channel.
Do you know where your best clients come from? Do you know what it costs to acquire a client? Do you know how much money you make from each client?
If You Can’t Measure It, You Can’t Manage It.
Part one of the lead generation article can be found here.
Written by Stephen Halasnik, Cofounder of Financing Solutions which provides lines of credit to businesses and nonprofits. Mr. Halasnik has built several successful companies in the $5-$20 million/yr in revenue range including a company on the Inc 500 fastest growing list.