A good lead generation strategy is about attracting, identifying, and nurturing your target customers consistently.
But how can you tell if your current tactics are successful? Well, it really depends on your goals.
So, here’s exactly how to measure the effectiveness of your lead generation so you can optimise your strategy, double down on what’s working, and stop wasting money on what isn’t.
What are your lead generation goals?
To make sure we’re on the same page, a lead is someone who expressed an interest in your business (for example, because they signed up for your lead magnet, contacted you through a form, clicked on a specific link on your website and so on).
But you can’t measure the effectiveness of your lead generation if you don’t know WHAT you’re aiming for! So, start by identifying your goals, and then work your way backwards.
Here are the main quantitative and qualitative metrics for the most common ones.
1. Lead quantity and quality
As our founder Daniel Priestley always says, EVERYTHING in business is downstream from lead generation.
The more isn’t always the better, though! You don’t want to spend a tonne of time, energy and money talking to people who are never going to become customers, do you?
So, focus on getting more relevant leads.
Number of leads
This is simply the total number of leads that you generated across all your channels over a set period of time.
Whether that sum is good or bad will really depend on your goals and business model (for example, a wealth management firm with multiple branches will probably need many more leads than a self-employed personal branding coach).
But overall, this number will show you what your current strategies are bringing in, making it easier to put the following metrics into perspective.
With ScoreApp, our platform to build a full quiz funnel for lead generation, it’s a breeze to keep track of it: that number is always on your dashboard!
Lead quality
This is about scoring your leads based on how likely they are to become paying customers.
How you measure this will depend on your criteria and the tools you use, but a popular starting point is the BANT metric:
- Budget – Can this lead afford your products or services?
- Authority – Have they got enough power to influence or approve purchasing decisions?
- Need – Have they got a problem that they want to solve with your products or services?
- Time frame – Does their ideal buying timeline match your goals?
Once you’re clear on that, you can set up your own lead scoring system (for example, on a scale of 1 to 10). Some CRMs and lead generation tools include it as a built-in feature.
If you then realise you’re attracting too many low-quality leads, you might need to change your lead magnet and strategy to appeal to the right ones.
With ScoreApp, you can improve your lead quality through pre-qualifying questions (around 10% of your entire quiz) like “What’s your budget for X?” or “What’s your biggest challenge when it comes to Y?”
2. Conversion rates
Getting more eyeballs is a great start, but you must also convert them into actual leads and then customers (ka-ching!).
Visitor-to-lead conversion rate
Especially relevant for your website or landing page, this is the percentage of your visitors who leave you their contact details.
The formula to calculate your visitor-to-lead conversion rate is number of leads ÷ total number of visitors, multiplied by 100.
So, if you get 5000 website visitors and 200 new leads per month, it’s 4%.
While it depends on several factors (from your industry to whether you’re calculating it for a lead magnet or a contact form), the average visitor-to-lead conversion rate is 2-5%.
If yours is too low, improve your website, landing page copy or lead magnet to make them more compelling for your target customers.
For example, traditional PDF lead magnets only convert at 3-10%. With a valuable ScoreApp quiz, on the other hand, you can expect a whopping 30-50% visitor-to-lead conversion rate!
Lead-to-customer conversion rate
While you do need a consistent stream of leads, don’t forget that they aren’t the ones paying the bills (yet): customers do!
So, measure the percentage of leads that convert into paying customers as well. Your formula is number of customers ÷ number of leads, multiplied by 100.
For example, if you got 12 new customers and 150 leads this month, it’s 8%.
It changes depending on several factors (like your industry), but a standard lead-to-customer conversion rate tends to be 3-10%.
Is yours too low? Then, optimise your lead nurturing and sales processes (for example, by using a ScoreApp quiz funnel to segment your leads and send them more personalised communications and offers).
3. Cost metrics
How much is your lead generation costing you? Once you know this, you can start using your budget more strategically.
Cost Per Lead (CPL)
This value shows you how much it’s costing you to acquire each new lead on average, allowing you to measure the efficiency of your marketing and lead generation efforts.
The formula to calculate your cost per lead is marketing and lead generation spend ÷ number of leads you acquired over a set period of time or with a specific campaign.
So, if you spent £1000 on a campaign and got 248 leads, your CPL is £4.03.
The average cost per lead changes depending on all kinds of factors, but especially your chosen tactic (for example, events tend to have a higher CPL than content marketing). So, it’s important to analyse it in relation to your budget and goals.
With ScoreApp, your cost per lead will be super low or even ZERO. Yep, you can start with a completely free lead-generation quiz and only upgrade to a paid plan when you actually need more features.
Customer Acquisition Cost (CAC)
As seen before, a lead hasn’t become a customer just yet, and statistically… most of them never will! So, get clear on how much it’s costing you to get paying customers, too.
The formula to calculate your customer acquisition cost is your total marketing and sales spend ÷ number of customers you acquired over a set period of time.
So, if (during the first quarter) you spent £2000 on marketing and £1500 on sales and onboarded 57 people, it’s costing you £61.40 to acquire each client.
With ScoreApp, you can lower your CAC, too. Your free or low-cost quiz will keep bringing you new leads, pre-qualifying them and nurturing them automatically. For example, you can set up different email sequences for each segment and include relevant sales-enablement content. That way, your sales team will only get on calls with prospects who are extremely likely to convert!
4. Engagement metrics
This is another way of measuring the effectiveness of your lead generation: looking at how (or if) your audience is interacting with your content.
If you get good engagement rates, it means you’re showing the right messages to the right people, and they’re clearly LOVING THEM. If they’re low, work on that (we have some tips for you soon!).
Of course, how you calculate these metrics will depend on what lead generation tactics you’re using, but let’s look at the most common ones.
Email open and click-through rates
Most email marketing platforms calculate these automatically for you.
- Open rates (number of emails opened ÷ number of all emails delivered, multiplied by 100) – How many subscribers opened a specific email? A good email open rate is 36.5%, although it varies depending on your industry. However, open rates don’t tell you the full story! Maybe someone opened that email just to delete it or unsubscribe straightaway. They’re no longer reliable, either: if someone blocked images or disabled external content, the pixel used to track open rates won’t load (= that email won’t count as ‘opened’). So, do look at yours to get an overall idea but take them with a pinch of salt
- Click-through rate (number of clicks ÷ numbers of all emails delivered, multiplied by 100) – How many subscribers clicked on at least one of the links in a specific email? This is a more accurate and important metric, and while the average CTR changes for different industries, 1.4% tends to be fairly standard
If your open and click-through rates are lower than you’d like, you can improve them by:
- Writing stronger subject lines that make your subscribers curious
- Delivering on that promise (no clickbait!)
- Sending relevant and personalised emails (with ScoreApp, you can do this by segmenting your subscribers based on their quiz answers and then setting up different versions for each of them)
- Writing engaging email copy, and making it easy to scan and read
- Focusing on ONE clear call to action per email
- Curating your list regularly to get rid of those who just aren’t engaging with you
Content engagement
This is how your audience interacts with a piece of content that you published online.
This metric will look different depending on your chosen platform, but luckily, most of them give you analytics to measure it automatically. For example, it could be:
- Time spent on a website page and how many of those visitors clicked on your CTA button
- How many times a blog post was shared on social media
- How many reactions and comments you received on a post
- Average video watch time
Overall, your content engagement metrics show you if what you’re putting out is relevant and valuable for your audience.
For example, with ScoreApp, you can always see how many people complete your quiz, how long they take on each scorecard entry and where they drop off. That way, you can optimise your quiz accordingly!
And if your content engagement rate is lower than you wish, you can improve it by:
- Always creating content with your ideal customers in mind
- Writing compelling copy or scripting your videos to grab and retain their attention right from the start
- Making your copy and design work together so that your content is easy to digest
- Including clear and unmissable calls to action
5. Sales metrics
Most of the previous metrics show you if you’re actually attracting the right target customers and getting them to engage with you. In other words, you measured the effectiveness of your initial lead generation and marketing.
If your nurturing and sales process isn’t optimised, though, it’ll all be for nothing because… those leads won’t become paying customers!
So, look at the following, too.
Sales Qualified Leads (SQLs)
Remember when we talked about lead scoring? A common way of doing this is by separating:
- Marketing Qualified Leads (MQLs) – These are contacts who appear to be more likely to become customers if they’re nurtured properly
- Sales Qualified Leads (SQLs) – These prospects have already been pre-qualified by your marketing team and should be ready to talk to sales
When you’re clear on what that means for you (based on your lead scoring criteria and system), you can calculate your MQL-to-SQL conversion rate: number of SQLs ÷ number of MQLs, multiplied by 100.
So, if in 3 months you got 75 MQL leads and 19 of those got “promoted” to SQL status, your conversion rate is 25.33%.
To give you a rough idea, the average MQL-to-SQL conversion rate is 13%. If yours is lower, review your pre-qualification and nurturing process: are you weeding out the wrong-fit leads? And are you sending relevant content and touchpoints to the right ones?
With ScoreApp, you can boost this conversion rate by pre-qualifying more leads automatically and setting up personalised sequences and steps for each segment.
Sales cycle length
How long does it take for your leads to enter your world, move down your sales funnel and become actual customers?
Most CRMs and sales tools will calculate this for you, but the formula is total number of days to close all your deals ÷ total number of new customers.
A short sales cycle indicates a highly successful lead generation and nurturing process. However, keep in mind that this can vary depending on several factors, including your industry. For example, in the B2B world, the average sales cycle length is 102 days.
To speed up yours, you can:
- Pre-qualify your customers (for example, with more strategic ScoreApp quiz questions)
- Use automation and a CRM to keep track of all your touchpoints without human error
- Send sales-enablement content and social proof to build trust, educate your audience and prime them for that sale
- Personalise all your interactions, making them relevant for each prospect (like referencing their quiz results)
- Follow up timely and with a bespoke touch
6. Return on investment (ROI)
Earlier, you worked out the cost of your lead generation. Now, use it to calculate how profitable it is.
Your ROI formula is total revenue generated by your customers ÷ marketing and lead generation spend (or marketing, lead generation and sales spend, if you’re measuring them together), multiplied by 100.
So, if you spent £4000 on lead generation and the clients you got from it paid you £20,000, your ROI is 500%.
In this case, it’d be tricky to give you an average, because a “good” ROI changes depending on too many factors, from your industry to the tactics you used.
So, instead of comparing it against external numbers, use this calculation to measure the effectiveness of your current lead generation tactics: are you using your budget strategically? And is this taking you closer to your financial goals?
7. Lead source performance
You should also get clear on where your leads are coming from and what tactics are bringing you the best results.
Source attribution
This simply means identifying how many leads (and especially high-quality leads) are coming from each of your channels, like email, PPC, organic search, social media—and if so, which platforms—or events and so on.
Once you know which channels are bringing you the most and best leads, you can choose to focus on those or optimise the rest (for example, by using your quiz lead magnet as your main CTA on Instagram as well).
Source conversion rate
What channels and tactics are bringing you the most conversions (= leads that turn into paying customers)?
This is the same as measuring your conversion rate, except this time you’re using data from individual platforms (for example, the number of customers you got from Instagram ÷ the number of leads you got from Instagram, multiplied by 100).
This might show you that:
- Some channels are collecting more leads but a smaller percentage converts into customers
- Other tactics are bringing you slightly fewer leads but they’re higher quality and make you more money
Once you know this, you can (re)allocate your resources and tweak your strategy accordingly.
For example, you could use ScoreApp to pre-qualify the leads from a low-performing source and then send them compelling sales enablement content.
8. Customer lifetime value (CLV)
As well as measuring the effectiveness of your lead generation and sales, be strategic with what happens after that first purchase, too.
Specifically, what profit can you expect to generate from one customer throughout your entire relationship?
The formula to calculate your customer lifetime value is customer value (which is their average purchase frequency × average purchase value) × average customer lifespan.
So, if your clients tend to sign up for a £2000 retainer and stay for 6 months, your CLV is £12,000.
If yours is lower than you’d like (based on your type of business, industry and goals), you can improve it by:
- Elevating your customer service and overall purchasing experience
- Monitoring your customers’ satisfaction levels (for example, by collecting feedback through a short ScoreApp quiz and then improving your systems accordingly)
- Having a loyalty programme, a referral system or affiliates
- Upselling and cross-selling (for example, with ScoreApp, you can send relevant recommendations based on someone’s situation and needs)
9. Feedback and surveys
Percentages and KPIs can certainly point you in the right direction. However, to fully understand what your audience likes and dislikes about their experience with you, the most effective tactic is simply… asking them!
You can do that with a short but targeted ScoreApp quiz, using a mixture of quick-to-answer questions (like yes-or-no or sliding scales) and open text so that each participant can share their opinion.
Lead feedback
Target someone who’s recently entered your world: what are their thoughts on your brand? And what was their experience like?
With ScoreApp, you can also use this tactic to get feedback on a new product or service idea before developing it. That way, you won’t spend months and thousands of pounds building something that doesn’t sell.
How? Simple: by attaching a short quiz to your waitlist landing page.
Customer surveys
After someone has purchased from you, send them a different short quiz to gather their honest opinion. What did they enjoy the most? Is there anything that could have been easier? And how likely are they to recommend you to someone else?
Then, improve the rest of your customer experience accordingly, making your lead generation and sales process even more targeted and enjoyable for your new clients.
Measure the effectiveness of your lead generation and improve it with ScoreApp
Once you start measuring the different stages and aspects of your lead generation? You’ll find out what’s working and what can be improved, getting the most out of your budget.
But how can you do this successfully and consistently? With a ScoreApp quiz, of course!
When you set up a quiz lead generation funnel and review it regularly, you’ll get to:
- Attract more and higher-quality leads
- Boost your conversions
- Lower your lead generation costs
- Get more engagement
- Shorten your sales cycle
- Increase your ROI
- Get more leads from different sources
- Increase your customer lifetime value
- Monitor your analytics and collect feedback to improve your funnel even further
So, start making your lead generation more effective: create your ScoreApp quiz today and for FREE.
