Inbound Marketing Produces A Way To Predict Leads
Once inbound marketing turned marketing from an art into a science, a formula that converts activities into results was bound to become an actuality. In 2016, we’ll start to see this theory become a reality, and once we have enough data to know exactly what impact specific tactics have on results, a formula to predict leads is not far behind.
Just so we’re clear, this might be as complicated to calculate as Einstein’s Theory of Relativity. However, once you have all the data, the rest becomes an exercise in testing your formulas to see if you can consistently calculate the actual results. While this is very doable, it’s going to take some serious brain power.
What could we do with a formula for lead generation? The opportunities are almost limitless.
You could control the number of leads like a volume dial on the radio.
Projecting a slow month? Turn up the volume and drive more leads. Lose a sales rep? Turn down the volume and slow down the leads until you replace them. Planning on doubling revenue in just 12 months? Crank up the marketing to the exact degree and deliver the perfect amount of leads based on your funnel metrics. Looking for more modest growth for your comfortable lifestyle business? Dial in a modest number of leads that won’t tax your systems.
Once you know what activities drive leads and to what degree, you can literally turn them up and down as you need. Of course, turning them up comes with an increase in the investment. There is a direct correlation between the number of tactics and the required budget, but that’s always been the case. The missing piece is the expected results, and now we’re so close to being able to predict that mathematically.
You’d know exactly how much to invest in order to generate the perfect amount of leads.
Speaking of budget and investment, if this were to become a reality, you’d know that each lead costs you $750. So, if you needed 100 leads a month, you’d know that you have to invest $7,500 a month to get those 100 leads. Of course, every business is going to have a different cost-per-lead number, and the more competitive or challenging the industry is, the higher the number will be. But, at least you’d know.
Over time, as your team or your inbound marketing agency realize certain efficiencies, that number would actually go down. In addition, you’d see the impact of ancillary tactics also driving down that number. When, for instance, you have 2,000 followers instead of 20 followers, it’s going to be easier to generate your 100 leads, reducing that $750 per lead to $700 or lower.
If you had to cut back, you’d know the direct impact on incoming leads.
Marketing isn’t the only ball you’re juggling, and sometimes the business impacts how much you can spend on marketing. But, knowing the precise impact of cutting the budget is just as important as knowing how much it takes to drive leads.
Finally, this opportunity might prevent you from cutting marketing, which is usually the first line to be cut when things get tough, even though it’s actually the last line item you should do away with. Going from 100 leads a month to 50 leads a month is not going to help your business when times get tough; it’s just going to make it tougher. This is difficult to see sometimes, but perhaps it’s going to be more obvious.
You could prioritize marketing tactics based on their impact on leads.
What this means is you could actually reduce the number of leads and your cost per lead, but disproportionately. If you could cut your cost per lead from $750 to $500 but only drop from 100 leads to 95 leads per month, you might opt for that, right? Now, you’re investing $5,000 a month and still getting 95 leads. That might be a trade-off you’d be willing to make, but until now, you had no way of knowing if that was a possibility.
You could use this formula for any business in any industry.
The formula to calculate leads is always going to have a few variables that are unaccounted for in the math. For instance, every business’s program responds in a slightly different way, and every industry has a different set of impacting variables, like audience personas, competition, technology and more.
So, while the general formula would serve as a starting point, it would need to be revised and honed over time to more accurately reflect the specific variables resident within the business, the industry and potentially the individuals managing the business. Believe it or not, most of the time when we run into issues with performance, it’s not the strategy, tactics or implementation. It’s the client we’re working with. I know, it’s hard to believe, but true.
If the idea gets you excited, you should know that we’re not too far away from making this a reality. Inbound marketing agency leaders with the depth of inbound program experience are already looking into how to mathematically link tactics to results.
Our own agency has already created a number of models to predict inbound outcomes based on the effort and tactics put in up front. The results of the testing are very promising, and once completed, the vision of a predictable, scalable and repeatable lead- or revenue-generating machine will be a reality.
Start Today Tip – Give up the notion that marketing is a black box. Today, it’s much more predictable than ever before. Want more visitors to your website? Write more blog articles. There is a mathematical correlation between the number of high-quality, search engine-optimized, socialized blog articles and visitors to your website. Want more leads? Create more educational offers and post them to your website with landing pages, CTA buttons, lead nurturing and proper promotion. You will see an increase in leads generated. While it’s an extremely simplified version, we’re just a few months away from Bx + Cx = Leads.
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Posted By Author Mike Lieberman, CEO and Chief Revenue Scientist
Mike is the CEO and Chief Revenue Scientist at Square 2. He is passionate about helping people turn their ordinary businesses into businesses people talk about. For more than 25 years, Mike has been working hand-in-hand with CEOs and marketing and sales executives to help them create strategic revenue growth plans, compelling marketing strategies and remarkable sales processes that shorten the sales cycle and increase close rates.