This is the first in a series of posts discussing marketing ROI for a company launching a new product in a new category. First up, I’ll discuss cost per lead.
Wondering which marketing tactics have the lowest cost per qualified lead for a new product launch? Each situation can be different especially B2B vs. B2C. You also have to factor in the price at which you sell your products or services to get to the holy grail of marketing return on investment. But this is the first metric you can look at even before you have sales – cost per lead.
The chart above shows normalized cost per lead data for a high priced, technology software system + service priced at over $50K. It’s a new product being offered in an existing market, and as such, involves educational marketing to inform leads about its benefits and value propositions. A qualified lead was defined as a prospect that requested a demo. Simply downloading a white paper or clicking on an email did not count as a qualified lead. The data covers just 3 months of marketing spend since launch.
Understanding the Data
Costs per channel are normalized to the lowest cost channel, paid search, which is set to “1”. The channels are defined as follows:
Paid Search – pay-per-click advertising on Google, Bing, LinkedIn and Twitter.
Organic Search – leads obtained solely from key phrases ranking in search engine result pages.
Online Banners (Niche Site) – banner ads in industry-specific online publications very targeted with readership matched to customer personas.
Email Marketing – a drip campaign using white papers, video and customized landing pages setup through a marketing automation system and using a high quality (expensive!) list.
Social Media – leads captured through posts and content offerings on Twitter, Pinterest, etc.
White Paper Lead Generation (Media) – fee-based white paper promotion programs on trade media websites.
Public Relations – Editorial outreach only.
- Paid search, despite its naysayers, brings in leads at reasonable volumes if you can find niche key phrases that aren’t ridiculously bid up in AdWords. Also look to cheaper cost-per-click channels such as advertising on LinkedIn group pages and Google video ads.
- Organic search remains the “no brainer”. Setup your site to rank well on search engine results pages, produce great content and get quality pickup in online media and you’re golden. SEO lives – just not as a standalone tactic. Integrate it with other marketing efforts today!
- Online banners can be super expensive but in this case we found a niche site visited by key members of the target audience and created ads that spoke directly to these targets and their pain points.
- Email marketing was the biggest surprise. Six months from now I believe email marketing will be the lowest cost per lead in the chart given trends in the data. It’s negatively penalized in the beginning because the cost of a quality list is so expensive, but no doubt about it, the best quality leads are coming through targeted email sequence campaigns offering quality content.
- Social media and public relations take 6 months to really get going. Time will tell if these channels start to produce quality leads, however, their prime purpose for this company is brand awareness, not strict lead generation.
The real “proof in the pudding” is going to be cost per conversion calculated for each marketing channel. This product has a long sales cycle, so check in with our blog for future posts.
Author: +Chris Slocumb