Why would we want to know this?
Some of you will have full-time sales and marketing teams already, and will want to compare the costs of acquiring leads to research on industry average figures, to ensure you’re getting value for money.
Some of you may be considering taking the plunge of your first full-time hire in this area, and wondering if the numbers make it worthwhile compared with using an agency.
We did this research for a third reason, which we’ll explain at the end!
What are the two ways of calculating the average cost of a lead?
There are two main ways of calculating this – and we did them both.
1) Per-industry research.
We worked through the 20 most common industries, ensuring that a range of business sizes was represented, and in each of them found the most reputable piece/s of research on the cost of acquiring leads in those industries. Then we averaged them all to get one figure that represents an “average” cost of a lead, through all methods of lead generation.
2) Employee Cost and Effectiveness
This considers the average cost of employment of a full-time Sales & Marketing employee, and the latest industry figures on how many leads they would realistically generate, across a range of business types. We then combined them all to get one standardised, benchmark figure.
The Results
Overall cost of acquiring ONE new lead using all available methods: £237.20
Average cost of acquiring ONE new lead with a full-time employee: £98.80
OK that’s great – but why did you work it out?
We hope both of these numbers will be useful to you in considering your own marketing spend and effectiveness.
We were working on these numbers for a different reason entirely – to help you measure your websites.
No more empty promises
We strongly believe that websites should not just look great – they should be effective.
But no single metric on a website’s effectiveness has been available – until now.
So how could you judge whether or not a website was delivering reasonable value for money?
We’d like to introduce the new standard: Salesperson Equivalent Value (SEV)
What is SEV?
SEV is the new benchmark for website effectiveness at generating leads.
It can be used across all business types because it’s cost-independent.
It’s based on extensive industry research, and can be adopted in businesses that already have good data on sales effectiveness because it can include business-specific info if available.
It’s a single number that lets you know how good your website is at what it’s supposed to do – attract customers.
And – finally – it means you can compare how your provider is doing with any other website provider, in any industry, in a meaningful way, and a clear understanding on their value for money.
So how do I calculate it for my website?
Couldn’t be easier. You don’t need fancy analytics reports or anything like that. You simply need to know (or estimate) how many leads you receive through your website in an average month.
Then just multiply it by 2, and divide by a hundred – and bingo, there’s your Salesperson Equivalent Value.
Can you give me a practical example?
Sure! Let’s say your website reliably brings in about 5 leads per month. That means your SEV is 2 x 5 divided by 100. 10 divided by 100 is 0.1.
That means that your website is delivering as much value as a tenth of a full-time salesperson.
What can I use those figures for?
Lots!
Is my website cost-effective?
You probably already know (or can easily find out) the cost of hiring a full-time salesperson. Is your website costing more than, or less than, a tenth of that cost? If your website costs more – it’s NOT cost effective.
Will investing more in my website (and digital marketing) be worthwhile?
You want the best possible return on your investment – so you need to know, is investing in the digital world better than hiring an actual human to find you customers, or worse? With SEV, you can use the actual (or estimated) number of additional leads per month to compare against the actual cost of a person, and decide where your money is best spent.
Which web agency gives the best value for money?
When friends and contacts recommend their agencies to you, simply ask them for how many leads they get per month through their sites and you can quickly and easily calculate the SEV for each.
You can then multiply each one’s cost per month by their SEV to get one simple number with which you can fairly compare every single recommendation. The lower the number, the better the agency. Game changer!
Conclusion
The cost of a lead is great to know.
But having a new, simple metric that allows you to finally understand the actual value of a website, in a world of extravagant promises and confusing technical terminology?
That’s priceless.
If you’ve got any questions about Salesperson Equivalent Value (SEV) we’d be really happy to help answer them for you – just get in touch any time.
