When I ran a software company here in Denver, we marketed our software several ways. We used print advertising, direct mail, trade shows, and online marketing, including search engine optimization, banner ads and email marketing.
I carefully analyzed the results of each of our different marketing campaigns. What I found was pretty interesting.
Our most expensive leads came from trade shows. We spent about $150 to acquire each lead from a trade show. When we turned the sales team loose to follow up on that lead, many of them turned out to be a huge waste of time. These expensive leads had a low closing ratio, around 5%.
We did a bit better with print ads. We acquired leads at $20 – $40 each. When we followed up with them, we had a slightly better closing ratio than the trade shows.
The least expensive leads were generated through our online marketing. The leads cost us only a couple of dollars each. We had a high closing ratio, sometimes as much as 40% because they were highly self-qualified leads. They were people looking for a solution to their problem, and they had taken the time to engage with us through our website.
Compare a lead obtained at $150 with a 5% closing ratio to a lead that cost $3 with a 40% closing ratio. The cost of acquiring a client through our online marketing was a tiny, tiny fraction of the cost of acquiring clients through other channels. The gap became even more significant when we factored in the cost of the sales rep’s follow-up on the trade show and print ad leads.
As long as we continued to get a positive return on the trade shows and print ads, we did continue to use those methods. However, we put most of our attention and focus on our online marketing because it gave us our best return. By far.
To your success!