Analyzing Sales ROI: What is the Best Method?

Cost-Per-Deal versus Cost-Per-Lead

Evaluating 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. The numbers can often be hard to analyze when the intent is to restructure or refocus your efforts.   Knowing which metrics matter most to your company, product price point, marketing budget and size of your sales team will effectively 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, even early stage leads are passed along. The concept of "less is more" may not make sense until closed-lead statistics and lead management techniques are in place. Annual cost-per-lead numbers are hard to analyze when potential buyers are courted over years, not months. These factors combined make it difficult to know which leads will be worth the effort.  Most marketing professionals don’t want to make that decision too early.

So, at what point do you have a qualified lead? Have you ever felt you dropped the ball when an indecisive lead buys from your competitor because you disappeared?

A Holistic Approach

Sales teams tend to value cost-per-deal over cost-per-lead.  Measuring both will help you uncover gaps in your process. You might have an effective marketing team but not enough sales professionals to follow up and close the deals.  An initial holistic approach enables you to 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 them and having an ineffective 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.  

External professionals can help you understand the nuances of the modern market as well as the mindset of today's consumer.  

An effective strategy combines brand awareness with demand generation and lead nurturing programs.

Thoughtfully designed on- and off-line marketing materials will engage interested prospects who have real business challenges.

Your sales leads should have a high degree of confidence in the comprehensiveness and professionalism of your marketing information as it is an indication of 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.

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 a strategic business partner for your potential clients.