One main goal of marketing is to acquire leads that will hopefully turn into buying customers and even repeat customers. To start measuring your marketing efforts, we need to find out where those leads are coming from and measure which ones became your customers. That means we need to develop a system that tracks a customer from lead source to sale.
The hard part is that some of this needs to be done outside the accounting system. The good news is that there are many tools and analytics available to help in this process.
One of the first things to do if you don’t already have it set up is to record the lead when they enter your sales process. Enter basic information about them in your CRM (customer relationship management system) and be sure to ask them how they found out about you. This will help you track the lead back to the campaign or channel that they came in on. Once they’ve made a purchase, you can connect the lead to the customer record and track revenue by marketing source.
If your leads come in digitally, there are many automated tags you can set up to track where they originated, whether it was from the web site, a particular web page, a social media account or a link from an email you sent out.
An important statistic for businesses is cost per lead, how much it costs to generate one lead for your business. The cost will vary by channel or marketing source. For example, someone coming from your website will cost less than someone coming from social media in most cases.
Once you know how many leads to generate to make a sale, you can start calculating what your marketing budget should look like. More importantly, you’ll be able to forecast your revenue more accurately, too.
While numbers are probably the last thing you think about when you’re doing your marketing, they can be very effective for your bottom line. There are many metrics beyond cost per lead that would be valuable to measure as well. Here are just a few of them:
You might not think of accountants when you are doing your marketing, but we encourage you to think about the “numbers” part of marketing, the financial side. And as always, if you want help developing these processes and metrics, please reach out.
This is general information and should not be acted upon without first determining its application to your specific situation. Please contact your CPA or tax advisor for additional details.
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