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A Lead is Just A Lead – Or Is It?

by Allyson Robison 6 December 2012 10:30

When considering which advertising media to use, it is important for you, the business owner, to understand that not all leads are created equal. One-thousand leads are not necessarily better than 100 leads.

If you can’t judge an advertising program based on the number of leads it brings in, how can you tell if it will be good for your business? By reviewing average sales conversion rates which measure the number of successful sales against the original number of leads.

For example, if you get 1,000 anonymous email address leads but only 10 of those convert to sales, your sales conversion rate is 1%, but if you get 100 phone leads and 50 of them convert to sales, your sales conversion rate is 50%. Consider how much the advertising costs and you get:

  • Example 1 - 1,000 anonymous email address leads cost $1 each ($1,000 total), with a 1% sales conversion rate, means each sale costs $100.
  • Example 2 - 100 phone call leads cost $10 each ($1,000 total), with a 50% sales conversion rate, which means each sale cost only $20.

Wouldn’t you prefer each sale (or conversion) to cost only $20 instead of $100?

Yellow Pages vs Online Advertising

When you’re considering multiple advertising media, it’s important to not only evaluate the lead cost for each medium, but specifically the average conversion rates for each. For example, online conversion rates tend to be in the single digits, from 1% to 4%, whereas Yellow Pages deliver average conversion rates of 40% to 50%.

Below is a summary of popular advertising media, their average sales conversion rates, and the cost per sale.

Advertising Media Results Summary

What this means is that advertising in the Yellow Pages brings in more than 16 times more sales conversions than paid search even though each of those sales cost nearly three times as much as Yellow Pages display advertising or nearly eight times as much as Yellow Pages in-column advertising.

So, when you’re considering different media for advertising your business, don’t focus just on the number of leads but instead focus on the quality of those leads as judged by the medium’s sales conversion rates and cost per sale.

Ready to get high-quality leads with Valley Yellow Pages?
Contact an Account Executive at 800 350-887 to get started!

 

Source: CRM Associates, “Not All Leads are Created the Same: Conversion Rates Drive the Bottom Line,” September 2011.

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