Calculating Third-Party Lead Gen ROI
And why 'cost-per-lead' is not how you should be comparing lead gen partners.
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Qualified Leads Cost More Because They Are Worth More
Cost-per-lead is a red herring, at best. In the marketplace, lower cost providers are simply shifting other costs to you. For example, shared lead providers are shifting the cost of qualification to you.
Account for lead quality
Qualification rates for shared leads are low. Which means you need to buy more to just fill the top of the funnel. Qualification rates of around 20% are very common.
Spend less time qualifying and chasing prospects
A third partner lead provider that does the qualification for you can easily deliver close to 100% qualification rate. This is a game-changer, allowing you to spend your time on higher0value activities.
Focus on the Business Inputs that Matter
ROI is maximized by increasing the numerator (Value) and decreasing the cost (effort exerted). Do you know the basics of your business?
We are going to break each one down, give you our benchmarks, and show you how to do the math to figure out expected ROI.
Average Contract Amount
Your inspection offer should be returning jobs that span a range of total size but you want to have done enough to know what your average is going to.
Lead Qualification Rate
What percentage of the leads sent to you end up in a scheduled appointment? You should be tracking this by source.
Appointment Show Rate
Of the appointments scheduled, how many actually happen? Traveling an hour to a missed appointment is costly.
Close Rate
There are two ways to do this. We prefer to look at the # of deals closed from the total number of appointments held.
Have a Holistic View of Your Lead Gen Spend and ROI
Not all leads are created equally. We want to spell this out very clearly for you. Now that we have given you the inputs, our calculator will provide you with the outputs.
Cost-per-...
You name it, you can track it with our calculator.
Test Different Scenarios
What would a 5% bump in show rate do to the bottom line? What is our expected ROI?