Here’s the story of the ultimate chicken and egg in the world of paid media lead generation: how do you forecast your cost per lead (CPL) when you don’t have any historical account data as a benchmark?
Let’s establish why it’s important to set firm cost per lead targets in the first place, even where no prior data exists. First, a concrete plan to achieve expected revenue or profit goals will focus everyone’s mind and provide a tangible target to work towards. Including a cost per lead target is an integral part of this plan – after all, if you don’t have this defined there is very little basis determining the level of budget you should be using to achieve your business targets.
Planning any paid media campaign without a cost per lead target is like driving blind (and without any sat nav to guide you).
There are numerous blog posts and other sources on the internet which will at least give you a rough idea of a typical cost per lead benchmark for your vertical, or tap into your LinkedIn network or peer groups to get hold of this information.
A second important aspect to note here is that cost per lead varies considerably by channel for instance, across AdWords, Bing Ads, LinkedIn or Twitter advertising, so don’t assume one size CPL fits all. Thirdly, consider the type of brief your paid media campaign is working to – prospecting will require a much bigger investment per lead than remarketing. And fourth and finally, do make sure your conversion tracking is set up correctly before your campaign launches.
Once you have worked out this detail it is critical to devise a good strategy for how you are actually going to achieve your CPL target – for example by continuously adjusting your bids based on campaign performance, so that you are not paying top dollar for traffic which doesn’t deliver on efficient conversion.
Fast forward a week or two: you’ve written your battle plan including a cost per lead target; you have launched your campaign – now you can use the data that is streaming in to resolve initial challenges, helping you to troubleshoot and fix them early on in the campaign cycle. For example, is your cost per lead a lot higher than you had anticipated? Is this driven by a particularly costly but under-performing keyword? Are you using engaging and relevant ad copy? Are you making it as easy as possible for your potential customers to turn into a lead?
Based on the performance data the forecasting should be adjusted on a quarterly or ideally monthly basis. There will be external factors such as advertiser competition which will affect your cost per click and ultimately your cost per lead, so it is, therefore, important to tweak your targets and be as relevant and realistic with it.
It’s a simple story, in the end, to plan based on CPL. But don’t just make yours a work of fiction – bear in mind that an ambitious CPL target can spur you on, but an unrealistic is more often counterproductive for you and the business in the end.