Lead Generation

June 16, 2021

Eric

9 Lead Generation Metrics For All Business Types

Lead generation metrics help you more fully understand the results of your lead generation efforts. This gives you insight into the ROI of your marketing strategies and helps you identify which processes you need to improve.

But which lead generation metrics should you track? While it’s important to find the metrics most applicable to your own business, some are universally useful.

These are the nine that we’re covering today.

1. Lead to website traffic ratio
2. Chat to website traffic ratio
3. Call to lead ratio
4. Lead score
5. Sales qualified lead to marketing qualified lead ratio
6. Lead to ad ratio
7. Sales closure rate
8. Average lead value (per stage + per traffic source)
9. Upsell ratio

The typical process of online lead generation, as well as our 9 metrics, can be broken down into a three stage funnel: attracting, capturing and nurturing.

This “metrics funnel” approach is useful because it lets you examine your lead generation efforts like an engineer. You can clearly see where your leads are dropping off, how you might improve your numbers and whether or not the tweaks to your funnel actually work.

It’s important not to see this metrics funnel as a collection of disconnected statistics, but rather as a representation of your entire sales process. Because they are connected, each metric judges the effectiveness of the previous action in driving the lead to the next stage.

For each metric, I’ll show you why it’s important, how to measure it and how you might improve it. Let’s get started.

Why it’s important: This metric shows you what percentage of your website visitors actually convert to leads – however you've defined that. In the digital age, the majority of your leads will come through your website. This makes your lead to website traffic ratio essential to know and the first metric you should be measuring.

How to measure it: (Total number of leads / total website traffic) X 100.

How to improve it: A low lead to website traffic ratio is often the result of poor user experience, lead magnets that aren’t relevant to each page, or copywriting that is not strong enough to get people to take action.

Improving user experience is all about split testing elements to see if they make a difference. Making your website easier to navigate and working towards faster load times are steps in the right direction.

Your site should also have lead magnets that are relevant to each page’s topic. This increases the chances that anybody who lands on your website will find something appealing to them and leave their contact information. Still, even the best and most relevant lead magnets need compelling copywriting to drive people to act. Check out this guide for some copywriting fundamentals.

Regardless of your plan of action, make sure you exclude returning leads from your data, which any good data tool should allow you to do. These are website visitors that have already converted to leads, so including them will make your metrics look worse than they actually are. This is particularly important if you’re running a software-as-a-service in which existing users come back to your website for their daily use.

Why it’s important: The importance of this metric lies in the usefulness of live chat. When people visit your website, they want a quick and easy way to get answers to their questions. They also appreciate the chance to build a relationship with a brand - even if they aren’t planning on buying.

Live chat is the perfect way to do this. It’s intuitive, more flexible than website forms and mimics in-person communication. This means each site visitor that uses chat is more likely to become a valuable lead. Chat is also the preferred channel for customers so a high value for this metric will often correlate to increased customer satisfaction.

In addition, within a chat you are able to tag conversations with different labels. With our solution Userlike, for example, you could set up a "lead" tag to keep track of your most valuable conversations.

How we organize lead information with Userlike

How to measure it: (Total number of chats / total website traffic) X 100.

How to improve it: For website visitors to use your chat option, it’s first necessary that they can actually see it. Make your chat option loud and clear.

Making the benefit of your chat option obvious through good copy is also important. Tell the website visitor what kind of help you can give or common problems that your chat operator can help with.

Why it’s important: The sales call is typically the last step before a lead converts to a customer. Your call to lead ratio is important, then, because it measures how often you actually get your leads on one of those calls. This makes it a good indicator of how effectively you’re moving leads down your funnel .

The call to lead ratio is vital for companies that make use of a sales force. Keep in mind, though, that the “calls” half of this metric isn’t a constant. This metric is equally valid when considering how many demos, appointments, or in-person meetings you get per lead - whatever your business’s “last step” before conversion might be.

Also remember that you can simply invert this ratio for an outbound cold calling strategy. In this case you would have more calls than actual leads generated. It’s a lesson all business owners should take to heart: use whichever metrics apply to your business model.

How to measure it: (Total number of calls / total number of leads) X 100.

How to improve it: A low ratio for this metric means you aren’t driving enough of your leads to a call. This implies that even though you might be good at bringing in leads, you aren’t so great at bringing in qualified ones.

Buyer personas are a good place to start. This makes your marketing more targeted and decreases the amount of “cold” or “lukewarm” leads coming into your pipeline. You should also consider creating more specific lead magnets that are appropriate for your middle of the funnel leads. Because these leads are warmer and have a higher intent to buy, sales calls will be more likely.

Why it’s important: I just mentioned how important qualified leads are. Well, Not all leads are equal. Having a lead scoring system in place makes it easier to estimate how promising or valuable your leads are. This saves your company time and money. It also makes outreach to qualified leads by your sales team easier.

In addition, lead scoring also helps you figure out the value of your different marketing activities. You can then double down on the channels that bring you the best quality leads rather than focusing exclusively on more traffic .

How to measure it: There are multiple ways to establish a lead scoring system. Generally speaking, leads increase their score by meeting certain demographic requirements or performing different actions . These actions can include visiting your website, clicking a link in an email and interacting with your content.

Deciding which criteria will be scored and how many points each one will get is your main task here. Talking to your sales team for their take on this is crucial as they will often have insight into what makes a good lead.

That’s what we do at Userlike. When a new signup is identified as being from a target vertical industry (e.g. automotive), they get a higher score. In addition, we also give higher scores if a signup’s website has a certain Alexa ranking. This reflects their overall website traffic and indicates that they are a valuable lead we should focus on.

How to improve it: Once again, creating buyer personas is a useful first step. This gives you a clear image of your ideal customer and focuses your marketing efforts on the people most likely to become high-value leads.

Effective lead nurturing is also important. Providing useful email content, for example, builds engagement with your audience over time. This increases your open rates and results in higher lead scores for your contacts.

Why it’s important: At any given point your business is likely dealing with leads at all stages of the buyer’s journey. Some don’t know so much about your business and are therefore only ready to see marketing material from you, while others further along in their journey have a demonstrated interest in your product and are ready for a sales message.

This is where the terms “sales qualified” and “marketing qualified” come from. Measuring both of these values ensures you are spending most of your time and effort on the ones closest to a purchasing decision.

More specifically, the ratio taken together shows you how effectively your marketing efforts convert into paid customers. The higher the value, the better you are at bringing leads all the way through the funnel and the more profitable you will be as a business.

How to measure it: To accurately gauge this metric, you first need a system for identifying both marketing qualified and sales qualified leads. Which actions and behaviors qualify a lead for either group?

As just a few examples , marketing qualified leads have usually done something like downloading one of your lead magnets, filling out an online form, or repeatedly visiting your website. However, unlike sales qualified leads, they have not yet taken more direct actions that demonstrate a willingness to buy. This could include adding items to a shopping cart or clicking on one of your product ads.

Differentiating these two types of leads can be quite subjective and requires cooperation and agreement between the marketing and sales teams. Lead scoring clearly plays a crucial role in determining this metric, and can be a big help in simplifying the handoff between teams.

How to improve it: A low measure here is usually an indication that your marketing team is bringing in too many unqualified leads. In that case it’s time to tighten up your marketing . This calls for narrowing your marketing message to appeal to a smaller but more qualified audience.

A second reason for a low ratio might be that there is insufficient alignment between the sales and marketing team. Maybe they are not aiming for the same things. This is all about revenue marketing, which you can read about here . More open and regular communication between your two teams ensures that marketing will only pass off leads to sales that they actually have a chance selling to.

And remember: timing in sales is everything . Pitch your product to a lead before they’ve gotten to know you and you can kiss your sale goodbye.

Why it’s important: Paid advertising is often a good tactic for lead generation . When I worked as a Facebook Ads manager, for example, many of my clients used ads to drive traffic to one of their better-performing blog posts. They would then collect email addresses through relevant lead magnets and market to their new leads via email.

However you plan to use paid ads for lead generation, it’s important to know how well they’re performing. The lead to ad metric is one way of measuring this. That makes it particularly useful to look at for your marketing team, as well as anybody else involved with your paid advertising.

It’s important to use this metric in combination with average lead value. As long as your lead to ad ratio is higher, you are making more money from your leads than you are spending to acquire them. Knowing both these metrics accurately makes it much easier to effectively scale up your ad spend.

As always, keep industry benchmarks in mind. What looks like a low conversion rate might actually be an overperformer depending on your business type.

How to measure it: Total number of leads generated / total spent on ads.

How to improve it: If your lead to ad ratio is too low, it’s difficult to know exactly where the problem is. Split test different headlines, CTA’s and landing pages. Constantly reiterate to see if you can drive it up even further.

Why it’s important: While leads are important, they don’t mean anything for your business if they don’t turn into sales. Sales closure rate gives you an idea of how much revenue to expect given a certain amount of sales calls (or, as I’ve said, whatever action happens to be a “sales call” for your business). This makes a wide range of actions easier: budgeting, hiring, planning ad campaigns, etc.

How to measure it: (Total number of sales closed / total number of sales calls) x 100.

How to improve it: A low sales closure rate usually means one of two things: you either need to train your salespeople better or you need to bring them better leads.

If your leads are highly qualified and proven to be good matches for your offer, your salespeople are not as effective as they should be. You might set up training on overcoming objections or reaching out to leads within a certain timeframe. Check out our sales training whitepaper for more actionable advice.

If you know your salespeople are great at their job? Then you probably haven’t done enough lead qualification. Implement lead scoring to see your most valuable prospects before handing them off to the sales team. After all, people with a proven interest in your offer will be more receptive to your call . See metric 5 for more information.

One more time: sales closure rate, just like all of these metrics, should be adjusted to fit your own business. For example, a lot of companies have a fully automated sales process rather than traditional sales calls. In this case, your sales closure rate might measure the effectiveness of your email flows in converting leads to paying customers.

Why it’s important: Without understanding your average lead value , it’s impossible to understand the ROI of your marketing efforts. This means you are essentially shooting in the dark.

More specifically, an accurate measurement of average lead value lets you calculate how much you should spend to acquire it. This is especially important if you are implementing paid advertising in your lead generation efforts (see metric 6).

How to measure it: This metric is relatively complicated. Not only do you have leads coming in from different sources, spending different amounts of money on your products and services, but you also have various costs to acquire those leads.

For example, let’s say you get leads from both Google and Facebook, and that your leads from Google usually convert to customers more frequently. In this case your leads from Google would be more valuable, and you would likely want to prioritize your marketing to them over visitors from Facebook. That’s certainly the case with us at Userlike.

Not so straightforward, right? While this metric doesn’t boil down to a simple equation like some of the others, a good lead value calculator can help.

How to improve it: Improving average lead value is all about either bringing in better leads or increasing the amount of money your average lead spends. For better leads you need better targeting. Create customer personas and then direct your marketing at them. This narrows your messaging and appeals more directly to the leads you do attract, which raises their average lead value over time.

To get leads to spend more, there are a few different tactics you can implement. These include refining your lead nurturing processes, increasing your prices and implementing a relevant and valuable upsell (see metric 9).

It’s important to remember that different traffic sources often require different approaches or messaging. If the average lead value of a certain source isn’t what you expected, it pays to investigate.

For example, leads coming in from comparison platforms are likely to be in a “comparison mindset.” You would then tailor your message accordingly, highlighting how you stand out from other solutions more than you normally would with leads from other channels.

Why it’s important: For most companies, it’s easier to sell to existing customers than it is to new prospects. Do it right, your profit margins rise as you increase the average value of a customer. Do it wrong, you not only make less money than you otherwise could... but risk driving away customers that see your efforts as a money grab.

Upselling can also be a great way to build your relationships with your customers, assuming your upsell is valuable enough. This can increase both customer loyalty and satisfaction .

How to measure it: (Total number of customers that purchased additional products or services / total number of customers) X 100.

How to improve it: Effective upselling is all about making the customer feel like they have won . This comes down to two things: providing legitimate value at the right time and building relationships with your customers. There are many tactics for upselling that can work for your business model - check out this guide here .

The fastest way to raise your lead generation metrics

Many of our customers implement our website chat solution Userlike to improve their lead generation metrics. Website chat offers a flexible and natural form of customer communication and allows you to answer any questions that an interested web visitor might have. This means that it usually generates more quality leads than signup forms alone.

Plus, if you’re looking to capitalize on live chat’s lead generation powers, Userlike is simply a great place to start. Much easier and quicker than creating lead magnets from scratch, for example.

Give us a try, and improve your lead generation metrics across the board.

Sign up for a free trial today !