Question

Topic: Research/Metrics

Cost Per Lead For Inside Sales

Posted by Anonymous on 8/2/2005 at 10:18 PM ET 50 Points
I need to know what the average cost-per-lead-for-inside-sales is.

One method:
Inside sales is often measured by the number of appointments booked per week/month/etc. Assuming the appointments booked are considered as qualified leads, the cost per lead can be calculated by dividing the appointments by the inside sales rep's salary. Given this scenario, does anybody have any benchmark or 'average' cost per lead of inside sales by industry?

Any other ideas on how to meaure the productivity of Inside Sales? Any metrics for cost-per-lead for Inside Sales vs. say, Trade Shows?

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RESPONSES

  • Posted by ReadCopy on 8/3/2005 at 9:59 AM Member
    Not sure there will be an average cost!

    The best way is to work your sums backwards.

    How much each customer is worth to you (for the life of the customer or initial or average transaction)

    MINUS

    The cost of servicing the customer

    MINUS

    The cost of getting the customer

    EQUALS ... your profit on that customer.

    How much of that profit can you pass on?

    Doing this any other way may lead to unprofitable customers, which would lead to an unprofitable business!

    Good Luck
  • Posted by ReadCopy on 8/3/2005 at 10:00 AM Member
    Reading back, I'm not sure I haave answered the question!
    I still stck my the first part, in that there is no average cost, you just need to work out the sums based on your costs and acquisition objectives!
  • Posted by Chris Blackman on 8/3/2005 at 9:48 PM Accepted
    Fred

    I don't mean to hijack the thread, but are you saying:

    - Three weeks telemarketing ($2850)
    - Seventy QUALIFIED leads
    - One sale (of so far $100k)?

    Seems like the $40 cost per lead is dwarfed by the $2850 cost per sale... Or are other sales likely from the remaining 69 qualified leads?

    If not, what has happened with those leads? Do they represent lost sales?

    Just wondering whether implementing a formal sales funnel/pipeline management process might result in much greater conversion rates than 1/70.

    Conversely, to get back to arjunajayasinha's question, implementing sales funnel methodology would definitely help track the cost per lead and sale, PLUS give you a better way to manage and improve conversion.

    As to what is a good benchmark - AndrewS is right, whatever makes you money! It's going to vary based on industry, business, strategy and tactics. Comparing against someone else's is of little help. You ned to measure and track your own cost per lead AND cost per sale to manage the cost and contain it as much as possible.

    Hope this helps.

    ChrisB
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