Analyzing Sales ROI: What is the Best Method?

Cost-Per-Deal versus Cost-Per-Lead

Gauging marketing effectiveness is a numbers game. You might measure cost-per-lead, cost-per-deal, and, of course, total revenue dollars. Today's economy has altered the ability to effectively forecast ROI. This year's dead lead might be next year’s biggest revenue generator which makes lead recycling efforts crucial. Since the numbers can be rather hard to analyze with the intent of restructuring or refocusing your efforts, knowing which metrics matter most to your company, product price point, marketing budget and size of your sales team will help target your efforts and dollars.

Quality versus Quantity

Focusing on quality versus quantity is not a new concept and makes sense. However, many marketing people don't know what happens to leads once they are handed off to sales and, since they have quotas to meet, pass along even early stage leads. The concept of "less is more" may not make sense until closed-lead statistics and lead management techniques are in place. Plus, annual cost-per-lead numbers are harder to analyze when potential buyers are courted over years, not months. These factors combined make it very hard to know which leads will be worth the effort and most marketing professionals don’t want to make that decision too early.

So, at what point do you have a qualified lead? Have you dropped the ball when an indecisive lead buys from your competitor after you disappear?

A Holistic Approach

Sales teams tend to care more about cost-per-deal over cost-per-lead, but to get there, measuring both will help you uncover holes in the process. You might have an effective marketing team but not enough sales professionals to follow up and close the deal. An initial holistic approach is best, as it enables you see the big picture and analyze effort compared to return. Any lead can potentially end as a sale—some qualified leads won't and some long shots will. Minimizing marketing efforts to focus on qualified leads without clearly defining what that is, and without having an effective follow-up process from sales, will lead to disappointment.

Best Practices

Even the best-intentioned marketing teams can benefit from other professionals who specialize in marketing and sales tactics. You need to understand the nuances of the market as well as the mindset of today's consumer. Then, you should craft a strategy that combines brand awareness with demand generation and lead nurturing programs. Well-designed and compelling on- and off-line marketing materials will engage interested prospects with real business challenges. Your sales leads have high standards for the comprehensiveness and professionalism of your information as they speak to the level of quality and support they will receive if they select your product. Arm your sales team with expertly crafted presentation materials and a sales tool kit to close the sale. Remember, the most effective way to transition a lead to "qualified" status and then to a sale is to position your company as an industry thought leader and strategic business partner for your potential clients.