Ask anyone selling marketing software or services what their “cost per lead” is and you’ll get a different, and self-serving, answer. I’ve seen estimates ranging from single dollars to tens of dollars to hundreds of dollars. The cost is always the highest for whatever mechanism (trade shows, telemarketing, direct mail, marketing automation software) the competing vendor is hoping to trash.


Of course, everyone cooks the underlying cost numbers to make their approach look best. But you’re actually asking to be bamboozled because you haven’t defined a “lead.” It is just a name and a possibly outdated title and email address from a purchased list? Is it the current name and contact info of someone who actually visited your booth or downloaded a white paper? Or is it the name, contact information who has indicated (either through a registration form or their readership history) that they’re feeling the pain you can solve, own the hardware and software your product needs to work, and are willing to sit down and talk for ten minutes?


Naturally, the price goes up the better the “lead” is. A veteran marketing director working for a social media startup told me recently that white-paper syndication services charge about $25 per lead, (names of individuals with certain titles, at a given size organization, etc. But identifying which “leads” have the right other products to make them a good lead boosts the cost closer to $80. Winnowing the field down to those who have the specific problem his product solves, and is open to a call, winds up costing hundreds of dollars per lead.


Some vendors try to ease the confusion by differentiating between “leads” (less qualified) and “prospects” (more qualified.) Other cite a CPL (cost per lead) and CPA (cost per action) with the “action” being a lead downloading a white paper or taking a call. But whatever terminology you use, “cost per lead” is useless for calculating ROI unless you define “lead.”


The CPA metric is a good start, because it defines success as a specific action. And most marketers (like my friend) have a good intuitive feel for what they want from a lead. Just adding a few words – a lead who will take a ten minute call, or who downloads our white paper – are all it takes to set a clear and level playing field.

Author: Bob Scheier
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I'm a veteran IT trade press reporter and editor with a passion for clear writing that explains how technology can help businesses. To learn more about my content marketing services, email or call me at 508 725-7258.

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