How often are you really looking into the data your marketing is producing? Because understanding the metrics that drive your success is essential. And one such crucial metric for business owners and B2B marketing managers is Cost Per Lead (CPL).
In this comprehensive guide, we first dive deep into the concept of CPL, how to measure it effectively, its benefits and the challenges it presents. However, we'll also look at other key metrics to consider in your marketing efforts. So, fasten your seatbelts as we embark on this journey to demystify CPL!
Well, a Cost Per Lead, commonly referred to as CPL is simply a metric that tells you how much it costs to acquire a lead for your business. Leads are individuals or companies that have shown interest in your products or services by taking a specific action, such as filling out a contact form, subscribing to a newsletter, or downloading an e-book (you know those “free” guides that are actually just hiding the fact we want your email address to start selling to you 😂).
Well, measuring CPL involves a straightforward calculation:
CPL = Total Marketing Costs / Total Number of Leads Generated
So, let's break it down with an example. If you spend £1,000 on marketing efforts and, as a result, generate 50 leads, your CPL would be:
CPL = £1,000 / 50 = £20 per lead
Calculating your CPL regularly can provide valuable insights into the effectiveness of your marketing campaigns. It's important to measure both CPL for your individual campaigns as well as your holistic marketing efforts. In turn, this will help you identify what campaigns have performed and which you should chuck next time!
There is a difference between Cost Per Lead and Cost Per Acquisition, however you should measure both to get a full picture of your marketing performance. Ultimately, these insights can help you reduce costs, improve performance and educate your team on what works and what doesn't.
Now that we've got the basics down let's explore why measuring CPL is essential and the benefits it brings to the table.
Knowing your CPL allows you to allocate your marketing budget more effectively. You can identify which channels or campaigns provide the most cost-efficient leads and optimise your resources accordingly.
CPL is a critical component in determining the return on investment (ROI) for your marketing efforts. By tracking CPL, you can measure the revenue generated from your leads and assess the profitability of your campaigns.
Understanding CPL helps you identify your most valuable customer segments. By focusing on the channels that yield the lowest CPL, you can tailor your marketing strategies to reach your ideal audience more effectively.
You've probably heard the saying, "Marketing without data is like driving with your eyes closed"? Well, CPL data empowers you to make data-driven decisions. You can fine-tune your marketing strategies based on actual numbers, leading to better outcomes and higher conversion rates.
While CPL is a valuable metric, it's not without its challenges. Let's explore some of the hurdles you might encounter when measuring CPL.
Determining which marketing touchpoints contributed to a lead can be challenging. The customer journey is often nonlinear, making it difficult to attribute a lead solely to one channel.
A low CPL doesn't always equate to high-quality leads. You may attract many leads, but if they don't convert into paying customers, your CPL may not reflect the true value of your marketing efforts.
Accurate data collection and reporting are vital for CPL calculations. Inaccurate data can lead to misleading CPL figures and misguided marketing decisions.
A good CPL varies by industry and marketing channel, however a good benchmark to consider is whether the CPL is below £200. If so, then that tends to suggest a good cost per lead for your campaign. You can of course continue to work on reducing the CPL as you improve performance.
Below are some estimated CPLs by industry as of October 2023.
Industry |
Average CPL |
Media & Publishing |
£209 |
Marketing Agency |
£200 |
IT |
£306 |
Industrial & Manufacturing |
£209 |
Financial Services |
£224 |
Business Services |
£200 |
It's recommended to calculate CPL regularly, at least monthly, to track changes and make timely adjustments to your marketing strategies. It's especially important to measure CPL against campaign level efforts.
Absolutely, whilst a low CPL is generally preferred, a high CPL can be beneficial if the leads generated are of high quality and are more likely to convert into high-paying customers. In this case, use the power of market segmentation and assign appropriate CPL to your campaigns.
CRM tools like HubSpot, Google Analytics, and marketing automation platforms certainly can assist in measuring CPL accurately. However, we'll cover a bit more about HubSpot later on. We also help customers use a Lead Generation tool which has helped to significantly reduce CPL for many of our clients. Get in touch.
Firstly, focus on optimising your marketing campaigns and targeting the right audience. Secondly, continuously analyse and adjust your strategies for better efficiency. We focus on optimising "Product Market Fit" and "Message Market Fit" to improve results at Bravura Digital.
While CPL is a critical metric, it's not the only one that should be on your radar. Let's briefly touch on other key metrics to consider in your marketing reporting.
Understanding where your leads are coming from can help you allocate resources effectively, so take the time to analyse referral sources to identify high-performing channels. Understanding the origins of your website's visitors is crucial for several reasons:
Incorporating referral traffic analysis into your marketing strategy can provide valuable insights and opportunities for growth. Here are some tips to make the most of it:
Referral traffic is a compass that guides your digital marketing voyage. Embrace it as a valuable tool in your analytics arsenal, and use it to navigate the ever-evolving seas of the online world. Understanding and harnessing the power of referral traffic can lead to new horizons and opportunities for your business's digital success.
Understanding the differences between new prospects and existing customers is like recognising the difference between newcomers and loyal patrons in a bustling restaurant. Each group has distinct needs, expectations, and behaviours, and catering to them effectively can be the key to culinary (or marketing) success.
New Prospects are individuals or companies who have recently engaged with your business but have yet to make a purchase or commit to a significant action. They are like diners who've just entered your restaurant, curious but not yet fully invested.
Existing Customers, on the other hand, are those who have already experienced the value of your products or services and have chosen to return. They are your loyal patrons who appreciate the quality of your offerings. (Trusting that you deliver a remarkable service!).
Segmenting your leads into these two categories certainly offers several noteworthy advantages:
To harness the benefits of segmenting your leads into new prospects and existing customers, consider the following tips:
In conclusion, segmenting your leads into new prospects and existing customers is akin to having a well-organised kitchen in a restaurant. It enables you to craft personalised experiences, optimise your marketing efforts, and, ultimately, savour the fruits of customer retention.
By understanding and embracing the nuances of these two distinct groups, you can navigate the complex world of digital marketing with finesse, ensuring a delightful experience for all your "diners."
Utilising Customer Relationship Management (CRM) tools like HubSpot can streamline lead tracking, making it easier to measure CPL and other vital metrics. And in the land of modern marketing, the ability to gather, organise, and harness data is just like having a finely tuned instrument.
HubSpot, a robust CRM tool, serves as that instrument, allowing you to chart the course of your marketing efforts with accuracy and efficiency.
It offers a suite of tools for lead tracking, customer engagement, and data management and acts as a digital command centre, bringing all your marketing activities under one roof. Interested in implementing Hubspot? Get in touch here.
One of HubSpot's primary functions is lead tracking. It captures data on the interactions your leads have with your brand, from website visits and form submissions to email opens and click-through rates. Here's how it streamlines the process:
While using HubSpot offers a multitude of advantages, it's essential to consider some key points:
Utilising CRM tools like HubSpot is like equipping your ship with state-of-the-art navigation equipment. It streamlines lead tracking, empowers data-driven decision-making, and enhances the efficiency of your marketing campaigns.
While it's not without its considerations, its advantages make it a valuable asset for businesses aiming to navigate the intricate seas of digital marketing successfully. So, confidently set your sails, knowing that HubSpot will guide you on your marketing voyage.
In conclusion, understanding and effectively measuring the key metrics we've looked at here is fundamental to the success of your B2B marketing campaign. It empowers you to make informed decisions, optimise your marketing budget, and ultimately drive more conversions.
So, the next time you evaluate your marketing efforts, remember the significance of CPL, Referral Traffic and New Business vs. Existing Customers and use them as a compass to guide your journey towards more successful marketing.
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