Things to Consider When Panning Your Lead Generation Budget
Studies show that 53 percent of marketers allocate more than half their budget to lead generation efforts. To derive maximum return on investment (ROI) from lead generation efforts, marketers must prepare a lead generation budget that aligns with marketing objectives and takes into account the number of leads to be acquired as well as the overall cost of such lead acquisition. To help marketers get started, let’s take a look at factors to consider when planning lead generation budgets.
Determine your main goal
One of the first steps in creating a lead generation budget is setting up goals. Once you determine your main goal, it becomes easier to measure your results and ascertain how far you have come. To set attainable and accurate goals, you must be aware of the following key metrics:
- Average sales close rate
- Average deal size
- Percent of revenue from marketing goal
- Monthly revenue goal
Have customers fill out a form
Capturing leads through a form on your landing page is an important aspect of anylead generation strategy. To entice customers to sign up using your form, you must promise access to a free resource they will find valuable. Once you do this, the next step involves finding a way to drive all site visitors to this landing page.
The average conversion rate for a landing page stands at 2.35%. If you assume the landing page will convert at least this percentage of site visitors, you need to calculate the total number of visitors needed to achieve your lead generation target.
Once you’ve calculated the number of site visitors you need to drive to your landing page, you may be overwhelmed by the amount of web traffic you need to generate. To achieve your goals, you should create a budget that accounts for the following:
- Technology-Consider the cost of technology needed to produce and execute your lead generation strategy. For instance, you can purchase a marketing automation software that can create landing pages and easily capture lead information within your CRM.
- Process-You need to leverage various marketing strategies and processes to drive the required amount of web traffic to your site’s landing page. This involves influencer marketing, advertising, DSPs, etc. Although you may be unable to determine the exact cost of these processes, all you need to do is to choose the highest arbitrary number you’re comfortable spending and factor that into your estimated budget. You can adjust this number once you obtain accurate figures.
- Staff-You need to factor in the cost of hiring employees needed to execute the lead generation strategy. If you intend to handle it yourself, you should factor in the cost of your time.
To find the total cost of your lead generation strategy, add up the individual costs of technology, processes and staff. Once you do this, it’s time to determine the cost per lead (and lead value)and check overall ROI. You can calculate the cost per lead by dividing the total amount of your budget by your lead generation target. To calculate your lead value, multiply your average (expected) conversion rate with average deal size. Using these two numbers (cost per lead and lead value), you can check the ROI of your lead generation strategy and determine whether it’s worth it.