Ongoing lead flow and a constant stream of new customers are critically important to the ongoing profitability of any business. In this issue, I want to share one simple strategy for getting more leads and turning them into customers – lead optimization.
As I’ve stressed in many of my messages to you, continual marketing optimization in all areas of your business will boost profits, often without spending additional money. To get more leads, better qualified leads and convert them into more customers, you must establish and monitor key lead metrics. Only by monitoring can you continually optimize your lead development activities.
Here are the lead metrics to measure:
Lead to New Customer Ratio– This number indicates how many leads it takes to get one customer. The easiest way to calculate this is to take your total leads and divide it by the total number of NEW customers you have acquired during a specific period. This ratio should also be tracked by lead source to judge the relative effectiveness of each lead generating strategy.
Lead to New Customer Conversion Ratio– This ratio indicates what percent of the total leads created turn into customers. It should be tracked by lead source as well. By examining the conversion ratio, you can test different conversion strategies to determine which is more effective. One example is to evaluate the conversion ratio of each of your sales people. By identifying which of your top sales people have the highest conversion ratio, you can investigate top producer practices and teach their methods to other sales people not performing as well.
If you aren’t calculating the aforementioned lead metrics, here are some initial action steps you can take to apply these marketing methods for improved profitability:
- Begin capturing key lead metrics. Be careful not to overcomplicate your initial data capturing. Even an approximate estimate of these numbers will give you a basis for making more intelligent lead activity decisions. You can always continue to refine the accuracy of this information.
- Write down the number of leads you generated over the PAST 12 months from the top 3 lead sources, and in total.
- Write down the number of new customers you added from these sources in the PAST 12 months.
- Test ways to optimize lead flow and customer conversion so you’ll continually improve the results.
Take action to apply this knowledge to your business. It’s all about implementation!
