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Topic: Research/Metrics

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How Do You Calculate Cost Per Lead/trade Show

Posted by Anonymous on 250 Points
I need to take all my leads from 2003 & 2004 - plus total money spent on all trade show - to show a metric of how much money each lead cost us. Is the formula:

Cost for yearly trade shows divided by leads from that show? And, furthermore... if we closed any business from that lead - how do you get a number for that?

  • Posted on Accepted
    Hi Marybeth

    Yes, take all your costs (yearly) and divide by number of leads generated.

    e.g. Total costs $1000 / Total No. leads - 100 = cost per lead $10

    If you recorded your source on these leads, then you will know if they came from the show or not and whether you succeeded to develop business from them. Often, this can take months in certain products or services.

    You should ideally measure:

    • Cost per lead

    • Cost per marketing medium used (cost per lead x number of

    • Sales per lead

    • Profit per lead

    If you say you got 10 new clients and they produced $5,000 in total new business from new leads, then

    Your 'Sale per Client lead' would be (ave) $500.00

    Your 'Profit per Client lead' would be (ave) $400.00

    Obviously, you wouldn't use averaging costs in reality but hopes it clarifies things.

    Hope this helps.

    Zahid Adil

  • Posted by Peter (henna gaijin) on Accepted
    As Zahid said, cost per lead is the cost for the show divided by number of leads.

    This number says somewhat how the trade show did, but is not necessarily good. For example, if you raffled off something at the show, you likely got a lot of business cards from people who wanted to enter the contest. These folks aren't necessarily leads, as they may have no interest in your product. But they likely would get counted as leads.

    Also, there are many ways to calculate the cost for show, ranging from just the cost for the booth space up through all costs (including travel expenses for those who work the booth - which can come from a different account within your company). A company I used to work for only calculated the costs that went back to MarCom (booth space, shipping, setup, if a MarCom person went to the show, etc.), but not the travel costs of people from other departments (sales and marketing), which often was considerable.

    if we closed any business from that lead - how do you get a number for that?

    If you did not have a system to track the information when you ran the trade show, then it is likely you won't get this data. Probably the best you can do is poll the sales force and ask if any of the leads from the show turned into sales (or are still potential sales).

    There have been various questions and articles related to this on this site. If you use the search in the blue bar at top to search articles, or the search questions link to the right to search questions, you can find more information on "ROI" and "lead tracking".
  • Posted by SteveByrneMarketing on Accepted
    Hi marybeth,

    You have received some good input from above. Our firm has build to a ”Tradeshow Return-On-Investment Calculator” to make it easier for marketers to understand their “cost per lead” data from tradeshow events.

    It’s not perfect, but I hope you find it useful.

    Best of luck,

    - Steve
  • Posted on Accepted
    As I agree with the answers above, just 1 more thing to add for cost per business closed: you can ask each of your customers where they first learned about you and how they decided to do business with you: this way you will count customers that did not necessarily left their business card at your trade show, but noticed you and contacted you later on for business

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