The Most Important Factor in Your B2B Lead Generation Budget

Oct 14, 2014

By: Asad Haroon

If yours is like many businesses today, probably one of your main concerns is how to sustain continued growth while still keeping within a reasonable marketing budget.

When it comes to B2B lead generation, how do you know how much of your marketing budget to invest? It’s not as complicated as you might expect. With a few simple calculations, you can be sure you’re on the right track and that your investment is more than a mere leap of faith.

Many B2B marketers become frustrated when they don’t see an immediate return on investment from leads, especially when evaluating leads from a new source. But it’s important to remember that sales cycles for most businesses average about three months. Even with qualified leads, will be some time before you begin to see a return on your investment.

You’ll also want to be sure you’re using the right metrics when evaluating your leads. For example, if your average sale per customer results in $250 in profit in the first year, and you purchase 10 leads at $25 each, with a ten percent conversion rate to acquire that new customer, you might conclude that you merely broke even on your investment.

Not so, if you consider customer lifetime value (CLV). This metric is being used increasingly as the best measure of lead value. CLV reflects the present total value of a customer to the company over his or her lifetime. When we discuss CLV, we typically refer to the value of a single customer, using the average sales of such a customer. The model of CLV can be broken down as a function of these three elements:

TP: Total Annual Profit (Total Sales – Cost)
TC: Total Customers
CL: Average Customer Life (in years)

Using these elements, customer lifetime value is calculated as CLV = TP X CL.

Although CLV could measure the customer’s value over his or her lifetime, most marketers use three years (based on considerations surrounding product life cycle, customer life cycle and profit calculations).

Now when you calculate the CLV of a single customer, you will see just what the true value is of your investment in leads. Plus if you factor in any repeat or additional purchases made by each customer, that $250 profit can turn into several thousands of dollars over the term of their relationship with you.

Companies like Amazon, whose average customer purchase may only be $20, typically spend significantly more than that sum in marketing dollars to acquire each customer. Why? Because they look beyond the initial buying cycle. These savvy marketers know that over a period of several years, that customer may very well spend thousands of dollars.

Your B2B lead generation dollars are an investment in the future of your business. You can be confident of maximizing your return when you start with pre-qualified leads who have indicated a readiness to purchase your services or products. Although lead buying should not necessarily be your only means of marketing, working with a good B2B lead generation company can complement and enhance the marketing efforts you already have in place.

Generating qualified leads can be a complicated process, but a good lead generation company can specifically tailor the lead acquisition process to the needs of your business so you can be certain you’re working with quality leads–leads who are actively seeking the services you provide and are more likely convert to longtime, valuable customers.

Assessing Quality of B2B Leads

Oct 14, 2014

By: Arlette Measures

quality leadThe importance of obtaining high quality B2B leads to advance your marketing strategy cannot be overemphasized. In fact, according to research conducted by Cisco Webex, a 10% improvement in lead quality can result in a 40% improvement in sales productivity. So how can you be sure you will be getting the best quality B2B leads, and consequently, the highest return on your investment when you buy leads?

Some lead suppliers provide you with only the title and contact information of the person making the inquiry, the size of their company, and possibly, how soon they plan to make a purchase. This data is useful, of course, in establishing the prospect’s qualifications, which give an idea of how much effort you will invest in them before they’re ready to buy.

But to find the true gems in B2B lead data, a company should go beyond basic lead-gathering methods. In-depth information gathered from a prospect’s online behavior will help you to accurately gauge their level of interest, or engagement.

Lead companies obtain this higher level of data through progressive profiling, which utilizes smart forms that can recognize a prospect and update their profile according to their activity on each subsequent visit. Activities such as reviewing blogs, articles, and other types of content will indicate, not only their interest in particular services, but where the prospect is in the purchase cycle.

Each of these activities is assigned a score, and each B2B lead is given a score based on which and how many of these activities they perform. A total of 20 points might indicate a “warm” lead, whereas a company or individual with a score of 50 would be considered a “hot” lead. If several people from the same company visit the site, their data should be combined to create a company score, which will give you an insightful overview of that company.

Brick and mortar businesses have always had the advantage of in-person contact with their customers, but high quality leads from a first-rate lead supplier will give you even more value in terms of your assessing a prospect’s readiness to purchase from you.