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Teenvio
3 Feb 2021
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Perhaps the question is not how much a lead is worth, but rather how much you would be willing to pay for a contact interested in the services you provide . Obviously, this varies greatly depending on the activity you are engaged in and the cost/benefit of your product or service.
To do this, we have illustrated this calculation with two different examples to measure its profitability, that is, whether the price paid per lead is amortized in the form of sales.
What is a lead?
We can define a lead or registration in the online environment as a person who has voluntarily provided their data through a web form or has called your business, for example, and who automatically becomes part of the database of the company or professional who owns that website. In some way, we can consider it as a contact that is part of the target audience to which the website is directed and as such it must be treated.
How do we calculate the cost of lead acquisition?
It's really simple, we just have to add up all the costs associated controlling directors email list with that purpose, for example: design of web forms, design of flyers in the case of capturing contacts physically from the business itself, cost of paid campaigns on Facebook Ads or Google Adwords in the case of having carried them out, proportional cost of the staff involved in the task of managing this task, cost of applications used such as in the previous example the email marketing one, etc. In short, any expense that can be totally or partially attributed to this purpose.
Once we have that figure, we simply have to divide it by the total number of leads obtained and we will have the CPA (Cost of Acquisition). CPA = Total Cost / Leads obtained.
The ROI
It is important to know the average acquisition cost as accurately as possible, since this value will give us information about whether or not this investment is profitable. Are we going to be able to cover these costs with the sales and profit generated by these new contacts?
Real examples:
We want to illustrate with real practical cases the cost of obtaining new contacts and the analysis of this profitability based on different assumptions and types of business.
Case #1: Plastic Surgery.
In this case, we analyze the acquisition of leads for a very common type of intervention in this field of medicine, breast enlargement. To get new patients, the clinic carries out Google AdWords campaigns that go against a landing page where the user can call by phone or leave their details to be called through a contact form.
Value of a lead
The average cost per click on an Adwords ad is around €6 in Madrid. This obviously doesn't guarantee you a lead, it just means that they reach your landing page. In the last two months, the average conversion rate (people who call or fill out the form) is 12%. That is, out of every €600 invested, 12 people convert, putting the CPA at €50 . To this acquisition cost you have to add campaign management costs (€120) which would bring it to around €60.
Calculating your profitability.
To calculate the effectiveness of your campaigns, we start from the assumption that 50% of the contacts obtained never come to the consultation and of the remaining 50%, 20% have been converted by carrying out the intervention with them, on average, within a period of no more than 6 months. That is, for every 100 clicks on the Adwords advertisement, an average of 1.2 patients are obtained. Or rounding up, for every 500 clicks, 6 patients.
The total cost charged for these purposes is €720 for every 100 clicks, as we have detailed. So, is the campaign profitable? If 500 clicks represent a cost of €3,600 and the sale of 6 breast augmentation surgeries, taking into account that each procedure leaves a gross profit of about €1,300, we can conclude that this lead capture is profitable, with an ROI of 216%. In this case, you get a little more than double the investment.
Case #2: Family Restaurant.
We are dealing with a family restaurant that does purely physical lead capture on the premises itself . To do this, it has designed some very attractive flyers with the promotion of a raffle for a family dinner among all those who leave their details that month.
As for the cost of acquisition per lead, we can calculate it as follows . The restaurant collects an average of 80 different contacts per month and the cost of the family dinner it offers is just under €30, considering the flyer to be practically negligible, which is only a few cents. With this we can conclude that it pays an average of €0.375 per lead.
Calculating your profitability.
This case is diametrically different from the previous one, and one of its major differences is that the acquired contact has a high probability of returning to the restaurant , so the possibility of amortizing the cost of acquiring the contacts increases significantly.
