Lead generation is one of the most common goals companies pursue via digital marketing. Online marketing is simply very convenient for achieving it. There are plenty of ways to do it, and you can launch a marketing strategy across multiple channels simultaneously.
But how do you know if your marketing campaign is efficient?
The only way to do it is to measure the performance of your lead generation efforts. The answer lies in key performance indicators. KPIs for lead generation are metrics that will help you become better in your lead generation game.
To help you out, we’ve decided to list six crucial KPIs for lead generation you should use consistently.
1. Bounce Rate
One of the best ways to assess the performance of your lead generation strategy is to look at the bounce rate. The bounce rate is one of the KPIs for lead generation that can help you check whether your site is relevant for your target demographics.
It’s a straightforward metric. The Bounce rate stands for the number of your website visitors that navigate away from your website without checking out other pages.
For instance, if someone finds your website on search engine result pages (SERPs), clicks on a link to your website, and then goes back to look at other websites in SERPs, this is a bounce. All analytics tools calculate the bounce rate using the same formula – the total number of site visitors divided by the number of visitors who immediately left the site.
What does the low bounce rate tell you? If this KPI is low, it is a good thing. Most visitors that come to your website spend some time on it, exploring and reading various content. On the other hand, if the bounce rate is high, then most of your visitors bounce off to other websites upon arrival.
Several factors contribute to high bounce rates. They can range from slow loading speeds to website content irrelevant to your target demographic.
In any case, you need to take all the factors into account so that you can identify what could be potentially wrong with your lead generation strategy or website. It is the only way to identify problems and reduce the bounce rate.
2. Conversion Rate
You probably know that conversion goals reflect your marketing goals. A conversion goal can be to have a website visitor subscribe to your email list or complete a purchase. Why is it relevant for lead generation? Lead generation and conversion go hand in hand. Finding out how many conversions your landing pages and homepage earn is very important.
When a website visitor decides to provide you with personal information and subscribe to your email list, he or she automatically becomes a lead. In other words, the number of conversions equals the number of leads. Boosting a conversion rate at the same time means fueling your lead generation strategy. This is why the conversion rate is one of the most useful KPIs for lead generation to track.
Conversion rates, just as bounce rates, represent a ratio. In this instance, a ratio of your website visitors and those that convert (take an action that you wanted them to take).
It is important to note that all your site’s pages have different conversion rates. The overall conversion rate is the average value of all your pages combined.
It is tempting to make statements like: “Anything around 5% is considered a good conversion rate”. But to be honest it depends on the context completely. The quality of the traffic affects it as well as the industry.
But if you would like to give some general rules of thumb, that really do not apply you can say that usually if your conversion rate is below 1%, it is not really good, but sometimes it still can be. But even 5% can be not that awesome, if you are talking about a conversion rate of a specific landing page, that could convert 20%.
The best strategy to improve your conversion rates is to assess the pages with the highest volume of content on your website. This is where something goes terribly wrong when your visitors arrive. Try to improve the layout, add high-quality content (text and images), and make your call to action (CTA) more prominent.
The changes provide instant results. Make sure to check your analytics software frequently and keep your eyes peeled for the changes in the conversion rate.
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3. Average Time on Page
Average time on page is the next KPI you should monitor with an ongoing lead generation initiative. It is a simple metric showing you the average time your website visitors spend on your site before they bounce off to somewhere else.
With excellent analytics software in your hands, you will be able to monitor the average time on page for every individual page on your site and the average time on page on your website as a whole.
This is an essential KPI, and learning how to read it will help you improve your lead generation efforts. Low average time on the page indicates that your visitors are spending too little time going through your content. High average session duration tells you that you did an excellent job content-wise, and your visitors decided to stay and read what you have to say.
However, low and high average session durations on their own mean practically nothing. How come? A high-performing landing page will have a low average session duration and a high conversion rate. On the other hand, you may have blog pages with high average session durations but high exit and bounce rates.
Average time on page is a KPI that you should always consider with other KPIs for lead generation in mind, including conversion, bounce, and exit rates. Other KPIs give meaning to average time on page, and without them, you can’t make the right decisions. It can help you tell relevant from irrelevant content and learn a lot by comparing pages with high and low average session durations.
Pay special attention to your pages with a text that takes at least a couple of minutes to read. If the average session duration is measured in seconds, it means that something is not good. Make your content more relevant and engaging to increase the average time on page and generate new leads.
4. Lead Quality
Thanks to your ongoing lead generation strategy, you will reach many prospects. However, not all prospects have the same intent. Some of them will be interested in only researching what you have to offer. On the other hand, some prospects can be just a few steps from making a purchasing decision. What they lack is a vital piece of information that will help them decide to purchase.
Lead quality is perhaps the most important KPI to track. It will help you assess your lead generation strategy’s performance in terms of the quality of the leads it generates. It can help you fine-tune your marketing initiatives to reach more relevant prospects and turn them into leads.
What should you track? The lead quality KPI is the number of interested prospects. Your goal is to get to as many interested prospects as possible.
Low lead quality typically comes with low conversion rates and high bounce rates. It means that you are not targeting the right demographic and that your messaging is not as effective as it should be.
On the other hand, a high number of interested prospects means that you did an excellent job with your marketing initiative.
If you are struggling to attract interested prospects, you should reconsider your marketing approach. Refine your targeting strategy. Try expanding your reach or make targeting more specific. You should also take a look at your offer, consider a new sell proposition, and change your messaging to attract more interested prospects.
5. Main Lead Channels
Today, it is almost impossible to have only one lead generation channel. Projects use different methods to look for products and services. If you have an official website and social media accounts, you already have several lead generation channels. Add marketing efforts to the formula, and you have even more lead channels. The most common ones are: organic (via search results), paid, referral, and social media.
Identifying your main lead channels will help you discover where your leads are coming from. Why is it important? Your main lead channels have everything to do with your marketing strategy. Once you identify your main lead channels, you will be able to assess your marketing strategy’s performance and effectiveness.
There are a couple of ways to do it. Most analytic tools provide you with your website traffic reports. You can clearly see where most of your website traffic originates from. These reports include various details, including whether your visitors are coming from desktop or mobile platforms.
Some tools even automatically calculate lead generation rates per channel to help you easily track traffic sources and identify high-performing channels. You can do this manually hassle-free. All you have to do is divide the total number of generated leads by the number of visitors that came through one channel
Feel free to ask the leads that contact you directly via a web form how they’ve heard about you. The more information you have, the better when it comes to getting insights and making data-driven decisions.
A low lead generation rate for a particular channel indicates that something is off with your marketing strategy. It can be something with your targeting or messaging. In either case, you should try to fine-tune your approach and see whether it delivers expected results. If no action bears results, it means that your target customers are not particularly fond of using the platform you use to reach them.
Channels with high lead generation rates are the bread and butter of your lead generation strategy. Maintain your focus on them and include them in your future marketing efforts to get consistent results.
6. Cost per Lead
Cost per lead is a metric that goes hand in hand with lead quality. Among all the KPIs for lead generation, this is the only one that can help you assess the cost-efficiency of your lead generation efforts, calculate ROI, plan your budget, and base your future projections on accurate financial data.
It stands for the total amount of money you invest in generating a lead. To be precise, we are talking about the average cost per lead here. You can calculate it by dividing the amount of money you spend on generating all your leads with the number of leads generated.
Make sure to take into account all costs, such as the cost of your analytic tools, subscriptions to services you use to capture leads, content marketing, and paid ads costs. Some of the materials used for lead generation can be reused in future campaigns (such as free ebooks). Services based on subscription, such as email marketing software, can also be used in future campaigns.
To assess cost per lead accurately, you have to modify your formula and divide the recurring and one-time costs by the number of campaigns you use them for. For instance, you paid a $50 subscription for email marketing software and used it to launch ten campaigns. The cost per campaign is $5, and this is the number you need to use to calculate the cost per lead generated in those campaigns.
Cost per lead is also useful if you want to step up your budgeting game channel-wise. You can calculate the cost per lead for every marketing channel to identify those that are cost-efficient. With this data at your disposal, you can custom-tailor your strategy to get the best results for the least money possible.
Lead generation is a long term effort despite the size of the business and target market. Tracking KPIs for lead generation we listed above will put you in complete control of your strategies. You will be able to assess the performance of your marketing initiatives both in general and per marketing channel.
Furthermore, as you could see, specific KPIs for lead generation indicate what could be off with your approach. And, at last, you can assess the cost of your lead generation strategy and make your operation cost-efficient.