Let me guess…
You’ve been staring at your marketing numbers for hours — maybe even days. Your eyes have gone blurry and you can feel a headache coming on.
But you’re still no closer to knowing what you need to know.
You still aren’t sure which parts of your marketing are working… and which are just extra expenses. Worse still, you’re not sure how to tell which leads are the really valuable ones, and that’s leading to lots of effort spent on leads that never convert.
It’s like that old saying from John Wanamaker, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” And you’re in good company… research by IDG Connect found that 70% of marketers struggle with cost justification.
Except these days, with all the tools available to us, it doesn’t have to be that way.
Let’s Talk Numbers: Determining Lead Value
You’ve heard over and over and over — customers won’t buy the first time they see your stuff.
That’s why we create email nurtures, write blog posts, pay for ads, and use retargeting: so customers are exposed to what we have to offer again and again.
I know that’s certainly true for me. It wasn’t until the fifth or sixth time that my car dealership emailed me this month that I remembered to call and schedule an appointment.
However, not all things are created equal. Different customers will interact with different marketing pieces along their journey; but some marketing pieces will perform better than others. Some will increase the chances that that lead will eventually pull out their wallet.
But what if you could tell by their actions how likely they are to convert? And better yet, what if you could use that same data to determine which marketing pieces are most effective?
To do that you need to determine your lead value.
A lead’s value is the amount that a single lead is worth on average across your list. So if I have 100 people who go through my list and they spend $1,000 total, that means that each lead is worth $10 in aggregate.
You can see why this would be useful — it helps me determine how many leads I need to bring in to make $1,000, all things being equal.
What Works & What Doesn’t: How to Identify Linchpins in Your Customer Journey
Now that we know our top level lead value, let’s take that one step further.
So lets say I have those same 100 people on my list. Of those 100 people, 10 of them attended a webinar and 90 of them didn’t attend the webinar. The 10 who attended the webinar are the ones who ultimately made a purchase — the other 90 didn’t buy anything.
Now, I can say the 10 people who attended the webinar have a lead value of $100, and that those who didn’t have a lead value of $0. And that tells me that the webinar was incredibly effective.
Of course in reality, we’re not just talking 100 people, and we’re not just talking one webinar. In any given funnel, we’re hopefully tracking dozens of marketing touchpoints, each of which are being seen by different customers as they go through their personal customer journey.
Tracking all the numbers and figuring out your lead value, then tracking that back to specific marketing materials… that’s hard work.
And that’s where the real value of your lead value comes in — by tracking your customers through their journey and evaluating which touchpoints are most valuable.
But it doesn’t stop there — we can take that same data and use it to help you determine which leads are most likely to buy… so you can focus your sales efforts more effectively.
Once you can measure your Lead Value, you can actually see as people go through your journey how much they are worth at each step.
So at step one they may be worth $20. Then at step 2, their value increases to $50… and people who don’t do step 2? Their value decreases to $5.
Tracking how each step of your funnel changes the chance to buy of each lead lets you understand how each marketing piece either increases or decreases your lead value.
Driving Revenue: Split Test Your Customer Journey
Let’s take this process one step further, and use this information to actually help us create and test new marketing materials.
Let’s return to our webinar example. If we know webinars are successful with our 100 leads and led those who attended to make a purchase, we can then split test two different webinars. Is one more likely to increase lead value? More likely to lead to a sale?
This is where you can go from simply analyzing data to actually driving revenue.
Mini Case Study #1: Split Testing Webinars for a 23% Increase in Revenue
One recent split test we used when working with a client was a lot like what I’m describing above: they had a webinar that had been shown to have a high lead value.
So we decided to split test it.
We created four different versions of that webinar, each of which focused on different parts of their product and shared different pricing information. Further, they shared that pricing data at different points in the webinar itself.
In Infusionsoft we set up the split test to randomly allocate people to one of those four funnels and measured the results. We had a clear winner — people responded better to webinars that focused messaging on their gender and occupation. The government career woman trusted case studies and messaging from other women in the government sector, while men trusted male case studies and messaging.
After implementing it, we quickly saw a 23% increase in revenue.
By now, I hope you’ve seen how important knowing your lead value can be. Each step in your funnel has an influence on the chance of whether a lead will purchase or not, and by identifying the touchpoints that convert you can filter out the parts of your funnel that lose you money.
SegMetrics is designed to help you track your customers through their journey and evaluate which touchpoints are most valuable.
But it doesn’t stop there — it can take that same data and use it to help you determine which leads are most likely to buy… so you can focus your sales efforts more effectively.
In fact, if you set SegMetrics up correctly, you can actually line up the touchpoints in your customer journey and tell the system what you’d like it to measure.