Why Outsourcing Lead Generation Is Here To Stay

by LGEN LLC 12.08.2022

How Much Does Lead Generation Cost?

Are you unsure about whether or not your marketing efforts are worth the money? If so, it may be helpful to determine the cost of your lead generation campaigns. This can help you determine whether or not a campaign was a good investment, and ultimately ensure the sustainable growth of your business. By calculating the cost of your leads, you can make more informed decisions about how to allocate your marketing budget. This can give you more confidence in your marketing efforts and help you avoid wasting money on ineffective campaigns.

The cost of lead generation can vary depending on several factors, including the type of campaign, the target audience, and the industry you're in. To determine the cost of a lead generation campaign, you'll need to consider the following factors:

1. The type of campaign: Different lead generation campaigns can have different costs. For example, a PPC (pay-per-click) campaign on Google AdWords may be more expensive than a social media campaign on LinkedIn.

2. The target audience: The cost of reaching a specific target audience can also affect the cost of a lead generation campaign. For example, targeting a niche audience with specialized interests may be more expensive than targeting a broader audience with more general interests.

3. The industry: The cost of lead generation can also vary depending on the industry you're in. For example, lead generation in the B2B (business-to-business) space may be more expensive than in the B2C (business-to-consumer) space.

Compare these factors to the number of leads generated and the cost per lead. This will help you determine whether a campaign was a good deal or not and help you ensure the sustainable growth of your business.

How do you calculate the costs?

Then you'll need to calculate the cost per lead (CPL) for each campaign by dividing the total marketing spend by the total number of new leads generated.

For example, if you spend $1,000 on a social media campaign and you get 10 leads, your CPL is $100. This will help you determine whether a campaign was a good deal or not and allow you to compare different campaigns to see which ones are the most cost-effective.

It's important to keep in mind that a low CPL doesn't necessarily mean that a campaign was successful. You'll also need to consider the quality of the leads and the conversion rate to determine the overall effectiveness of a campaign.

Average cost per lead by industry

Industry/Average cost per lead

Technology/$208

Healthcare/$162

Finance/$160

Manufacturing/$136

Business Services (Insurance)/$132

Travel & Tourism/$106

Media & Publishing/$108

Consumer Products/$105

Marketing/$99

Education/$55

Telecom/$45

Retail/$34

Non-Profits/$31

How to lower the costs of lead generation?

If you find out that the cost per lead is higher than their value, it means it’s time to redesign lead generation strategies. Check out the best tips for increasing the efficiency of your marketing campaigns.

1. Expand your prospects' database

It’s one of the easiest ways of hitting your goals. But instead of creating a contacts database manually, use tools to get actionable contact data. Upgrade your LinkedIn account to have the ability to obtain “possible” emails and phone numbers of prospects. Or use an email software that verifies email addresses.

2. Improve your company website

If you’re paying for traffic on Facebook or other lead sources, make sure your website is optimized for conversions. Include a clear offer above the fold and test it before launching. For example, you can show it to someone and ask if they understand the offer at first glance. You can also hire a professional marketing website builder who can do the testing and optimizing for you.

3. Narrow down your target audience

It’s hard to get optimal CPL without creating an ideal customer profile. A clear understanding of what type of company is most likely to need your products and services improves the cost-effectiveness of our lead gen efforts. For example, you can narrow it down by the job title of a prospect or even if they live in a certain city or county.

4. Use inbound marketing methods

Attracting inbound marketing leads organically is a great way of collecting bottom-of-the-funnel leads who are more likely to convert. You can offer different types of content for every stage of the funnel and nurture contacts through to the sale. It causes less friction than e.g. paid advertising.

5. Eliminate poorly performing channels

It is important to regularly monitor the performance of each channel or campaign in your lead generation efforts. This will help you identify which channels are the most effective at generating leads and which ones may be underperforming. By focusing your resources on the most effective channels and eliminating or reducing your investment in those that are not performing well, you can reduce the overall cost per lead and improve the return on your marketing investment. This can help you generate more leads and ultimately drive more sales for your business.

Key Takeaways

Here are some key takeaways to remember when it comes to the cost of generating leads:

1. The cost of generating leads varies depending on the method you use and the industry you are in.

2. It is important to analyze your customer base and the profit they generate in order to determine the cost of leads for your business.

3. In some industries, the cost of leads may be higher than in others, but the average cost per lead by sector should not dictate your spending.

4. To reduce the cost of generating leads, it is important to focus on the most effective methods and channels, and eliminate or reduce investment in those that are not performing well.

5. Regularly monitoring and analyzing the performance of your lead generation efforts can help you make more informed decisions about how to allocate your marketing budget and generate more leads at a lower cost.

What should I do next?

Lead generation can be an expensive endeavor, but it is an essential part of any successful marketing campaign. Hiring a digital marketer, buying sales lead lists, and paying for lead ads on social media can for sure help. Remember to calculate the cost per lead. This will help you determine the effectiveness and value of your lead generation campaign. The average cost per lead can vary by industry, so it's important to research and compare the costs in your specific industry above. By carefully evaluating all of your options and providers, you can ensure the sustainable growth of your business. Here is a provider that offers everything above with a simple pricing structure and customization.