Determining Client Lead Value

In order for an agency/client relationship to be successful, there is one thing that both sides must be aware of and thinking about at all times: The value of a lead.

What is a lead worth? If this isn’t accomplished in the sales process, it means 2 things:

  1. The salesperson is good.
  2. It is up to the account team to finalize this and have the client confirm it early on in the onboarding process.

The lead value must be the “critical number” that the entire digital marketing strategy is based on. The critical number must be the focus of every initiative the agency recommends. If an initiative does not impact that critical number, don’t waste your time. So, if this number isn’t available, follow these steps to arrive at the true value of a lead.

Step 1 – Define a “Lead”

If a potential customer comes to your site, there has to be a call to action that if acted upon, would qualify them as a lead. This action could be different things. For example, someone making a purchase or signing up for a newsletter, or completing a form would automatically qualify as a lead.

The process for defining what it looks like for a prospect to go from browsing to buying must be straight forward before you can assign a value to it.

Step 2 – Tracking

Now that you’ve determined what makes a qualified lead, you must be able to track a few key data points.

  1. This is a great exercise to look back at historical lead data over a certain period of time to arrive at an average number of leads over a set number of days. This could be over 1 month, a quarter or 5 years.
  2. During this same timeframe, calculate the average sales dollars that came in.
  3. What is the average profit per sale in that timeframe?

Step 3 – Do the Math

Your lead value will be equal to the average sales dollars within your chosen timeframe (step 2) divided by the number of leads during that same timeframe (step 1) then multiply that total by the average profit per sale in the timeframe (step 3). This will give you a lead value.

The true value in determining this for the business is knowing the critical number that ultimately reveals actual return-on-investment.


Prepare for the August 2014 shopping search transition with Google Shopping and data feed optimization:

Guide: The New Google Shopping

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