As luck would have it I’m responsible for web analytics on several lead generation sites. I’ve been working diligently for many moons to “close the loop” on these leads so I can optimize for leads that close, instead of just optimizing for leads in general. I’ve had pretty good success with this approach, but it brought to light a nasty little surprise: for most clients each lead has a high average dollar value, unfortunately the total number of leads is small enough that sales from leads are very small percentage of total company revenues. Not good if you want management to take the site seriously.
No one would argue that leads are the only value that a lead generation site provides. The 95+% of people who don’t convert must be doing something useful! There has been a good conversation about measuring “engagement” recently. Eric Peterson outlined a very robust measurement methodology that produces an engagement index. An abstract number like this is good for optimization, but I’ve found that a good, old fashioned dollar amount is much better at getting people’s attention. I’m wondering about the value, in dollars, of all the people who don’t submit a lead form.
This seems like an almost impossible task given the available information, but maybe it isn’t…. Iâ€™ve been assuming all along that submitting a lead form is an excellent indicator of purchase intent — that someone who submits a form is much closer to closing on a sale than someone who doesnâ€™t. It seems very obvious that this should be so, but I recently had kind of a goofy idea. What if this is assumption is bunk and lead form submitters are just a sample of average site visitors? What if they are exactly like all the other site visitors except for their propensity to submit lead forms?
If the submitters are a sample of the average then we can use their data to calculate the influence of the website on total revenue. Here are some (completely made up but reality based) numbers:
|Annual Unique Website Visitors||500,000|
|Average Sale Value||$ 10,000|
|Web Lead Close percentage||10%|
|Calculated Closed Sales from web visitors||50,000|
|Web Influenced Revenue||$ 500,000,000|
|Average Visitor Value||$ 500|
In the calculation above I’m assuming that the web lead close percentage applies to ALL site visitors, not just those who submit lead forms. The Web Influenced Revenue that results is a much more satisfying and believably large percentage of total revenue. For real lead gen sites that I’ve seen, the Web Influenced Revenue number as calculated above is typically between 50% and 80% of total revenue. This makes sense, I’ve seen research that the web influences around 50% of high consideration purchases.
The fact that the calculated revenue numbers line up so nicely with reality makes me think that my hypothesis isnâ€™t so goofy. Maybe the lead form submitters aren’t really that special. I think the only way to know for sure is to survey customers and see how much influence the website had on their purchase.
If we do assume that lead form submitters are a sample of the total site population here are a few things we can do with this info:
- Use the sample of closed leads to learn about other site behaviors — i.e. what does Eric’s engagement profile look like for this sample? How many other visitors have a similar profile?
- De-emphasize lead form optimization– most lead gen sites optimize for the lead form conversion but since relatively few customers actually submit a lead form this is really a low value activity in terms of overall sales.
- Use the calculated $$ amount to increase influence and power (buwaa hahaha).
Do you think I’m cracked? Let me know in the comments.