Calculate the Cost of Chasing a Lead. Reduce it by Giving
Below is a MRR and PLR article in category Business -> subcategory Marketing.
Calculate the Cost of Chasing a Lead: Reduce It Through Giving
Summary:
Have you ever considered the cost of attracting a single qualified lead? While you may receive numerous inquiries, not all turn into customers. How can an inquiry evolve into a qualified lead? This article explores the role of gifting in refining lead qualifications.Understanding Qualified Leads
To gauge the cost of acquiring a qualified lead, it's essential to know what constitutes one. A qualified lead should meet these four criteria:
1. Need: They genuinely require your product or service.
2. Affordability: They can afford the item or service.
3. Influence: They are decision-makers or can significantly influence purchasing decisions.
4. Timing: They know when they intend to make the purchase.
Chasing a customer who meets these criteria is known as lead development, which involves various expenses such as advertisements, labor, postage, or phone bills. Even meetings, including transport and materials, contribute to these costs.
Calculating the Cost of Leads
It's common that not all inquiries can be qualified. Some prospects might be unreachable due to various reasons. Suppose 15% of inquiries are unqualified, leaving you with 75% potential leads. Of those reachable, assume a 20% qualification rate.
Example Calculation:
- Total Inquiries: 100
- Qualified Contacts: 75
- Qualifying Cost per Inquiry: $20
- Qualified Leads: 15
- Total Qualifying Cost: $1,500
- Campaign Cost: $10,000
- Total Cost: $11,500
- Cost per Qualified Lead: $766.66
Thus, attracting each lead costs you $766.66. This significant figure varies across industries, emphasizing the need to improve qualification ratios.
Enhancing Lead Qualification Through Gifts
An effective way to increase qualified leads is by offering gifts to those who inquire. Choose memorable gifts, like a promotional pen with your logo and contact details, which need not be costly.
Revised Calculation with Gifts:
- Inquiries: 100
- Qualified Contacts: 75
- Qualifying Cost per Inquiry: $22 (includes $2 gift cost)
- Qualified Leads: 18 (assuming a 4% increase)
- Total Qualifying Cost: $1,650
- Total Cost: $11,650
- Cost per Qualified Lead: $647.20
Comparatively, $647.20 per lead with gifts saves you $119.46, yielding three additional qualified leads.
Gifting in Personal Visits
When qualifying leads involves customer visits, costs include transport, labor, and parking, often totaling $50 per trip. Adding $30 for marketing materials, the cost hits $80. Without a need, the visit might be wasted, but leaving a practical gift, like a $2 pen, could keep you in view, enhancing future qualification chances.
The Strategic Advantage of Gifting
Incorporating gifts into your strategy can drive down lead acquisition costs. A survey by American Express’s OPEN showed a 15% rise in gifting budgets in 2005, indicating businesses recognize the value of gifts in marketing.
Embrace gifting today to lower costs and boost sales. You might find yourself in a position you’ve never achieved before.
You can find the original non-AI version of this article here: Calculate the Cost of Chasing a Lead. Reduce it by Giving.
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