A Guide to Guaranteed Lead Campaigns: The End of Guesswork Marketing
A Guide to Guaranteed Lead Campaigns: The End of Guesswork Marketing
Catalyst for change can occur for any number of reasons. It just so happens that the continued adoption of performance advertising that has materialised in recent times is a direct result of the challenging economic situation and the resulting sea change in businesses' perception of marketing ROI.
As cut-backs and redundancies have become a harsh reality during the current recession, initiatives such as branding, PR and reputation-building are now seen as luxuries that are either far less attractive than they were or just no longer affordable as marketing budgets have been slashed by 20% or more1.
The latest IPA/BDO Bellwether survey2, published in January 2010 reveals that, while marketing spend has dropped again for the ninth quarter running, the rate of budget trimming has slowed which could signal a light at the end of the tunnel for marketers who've been struggling to maintain full marketing activity on less than a third of their previous budgets.
The economic downturn has therefore forced the hand of marketers to adopt a new approach to lead-generation. They expect the same quality of sales lead but, crucially, they also need to make sure that every penny can be accounted for and spent only on those leads that can be followed up or nurtured and are most likely to turn into customers either immediately or at some point in the near future.
So the consensus among businesses is now very clear indeed - generate the same or more revenue but at considerably less cost. Now while this might sound like nirvana for marketing departments who are feeling the pinch, can a squeeze on marketing budgets really equate to a growth in customer acquisition and, if so, how is it achievable?
Introducing Guaranteed Lead Campaigns
Guaranteed Lead Campaigns, also known as Cost-Per-Lead (CPL), are now increasingly being seen to provide one of the most proactive, flexible and cost-effective ways to deliver lead generation.
In short, Cost-Per-Lead introduces a whole new dimension to lead generation. Still a relatively new concept in the UK, the reasoning behind CPL is very simple, campaigns are crafted around a client's requirements rather than the other way around. So, rather than marketers turning to brokers of generic sales leads, they can use a model based purely on only paying for valid leads. CPL enables marketers to be able to demonstrate that profits and ROI can be directly linked to marketing investment.
5 reasons to implement a CPL campaign strategy
With marketing departments under constant pressure to prove the tangible business benefits of a marketing initiative and to squeeze maximum ROI out of every campaign, sales leads become the logical choice for budget allocation. After all, who'd argue against investing in the search for new customers?
The benefits of CPL are extremely compelling. CPL allows new levels of tailoring, measuring and managing campaigns than ever before and effectively puts an end to the need for both traditional and impression-based, see-which-way-the-wind-blows' marketing techniques.
The Cost-Per-Lead model provides the ability to:
Manage risk more effectively
Arguably one of the most important aspects of CPL is that it eliminates any possibility of wasted budget. Planning lead generation campaigns are therefore based on realistic goals rather than projected volumes.
Plan more strategically
Campaigns can be scheduled days, weeks or even months in advance with different suppliers, audiences and content. Sales resource can be planned to ensure optimised follow-up.
Budget more accurately
CPL means budget is directly linked to the lead volume required.
Target more precisely
CPL allows different levels of lead filtering' to determine the level of exposure that sales leads will receive. Maximum exposure (i.e. no filtering) will offer larger data volumes while less exposure (i.e. intensive filtering) is more appropriate for identifying more highly qualified leads.
Research more thoroughly
The Guaranteed Leads model also enables profiling' that provides marketers with an opportunity to discover more about their target audience. Additionally, opinion-based profilers are also able deliver some very insightful conversation starters.
How does CPL compare with other marketing methods?
Digital media undoubtedly offers the fastest and most effective way to harvest lead generation details and measure campaigns using clicks, website downloads and emails.
Over the last few years, digital media has grown exponentially, even surpassing established marketing and advertising methods such as TV in September 20093. It seems that new forms of online marketing are surfacing all the time but finding out which is most appropriate for your business can be a significant challenge when planning a campaign, so let's examine how CPL compares with other marketing methods:
CPL vs Pay-Per-Click (PPC)
Cost-Per-Lead is an integral part of the PPC advertising model and accurate campaign data of this type can be extracted very easily and in (almost) real-time. CPL enables higher levels of interest to be stimulated from your target market, whereas PPC can mean you are simply bidding for the active interest present at any one time.
Whether PPC is the best for your campaigns depends on what you're promoting and who you're targeting. If, for example, your goal is simply to gain brand recognition, then PPC is certainly an extremely cost-effective way to do this either on either a flat-rate or bid basis. However, making sales from any interest generated by PPC is an entirely different matter which especially true for businesses in those industry sectors where bids on high-value keywords can become very expensive indeed. So PPC isn't exactly the level playing field' we're often led to believe it is.
By comparison, the more highly profiled and greatly more relevant information (including contact details) offered by CPL will provide a much better measure of ROI and ensures that your budget is never exceeded.
CPL vs Cost per Mille (CPM)
Also known as cost-per-thousand, CPM is a commonly used benchmark to calculate the relative cost of a campaign per 1,000 views or impressions.
CPM-based campaigns are at their most effective when huge volumes of impressions are generated along with the ease with which those impressions can be measured. But one of its inherent weaknesses is its ability to correlate directly with sales or leads.
CPL has no such issues. It enables advertisers to buy both display and direct response advertising but, by paying for only qualified responses from interested parties, represents a vastly better way to measure ROI as well as keeping a lid firmly on advertising spend.
CPL vs Direct Marketing
Many DM marketers tend to think about their pieces in terms of cost-per-piece, in other words a direct calculation of the total cost of producing, printing and mailing a DM piece. Although this is an important metric, the true cost can only be derived by comparing the number of leads the DM pieces generate to the cost-per-piece.
However, average response rates to generic direct mail solicitations have dropped markedly in recent years driving up the cost of direct marketing in real terms.
By comparison, CPL ring-fences any additional costs borne by the DM marketer by way of its guaranteed lead generation model of only paying for the leads that are wanted to deliver a much greater ROI.
CPL vs Telemarketing
Although telemarketing has the capacity to produce highly-qualified leads as well as detailed information about a prospect, telemarketing falls into the higher end of Cost-Per-Lead overhead.
Ultimately, the success of any campaign should never be based purely on the number of leads but on the quality of those leads and telemarketing scores highly in this respect compared to other marketing channels but then so does CPL. The main difference here is that CPL can achieve this with a greatly reduced marketing spend to return a significantly better ROI.
CPL best practice
There are a few considerations that need to be taken into account before embarking on CPL campaigns. For example, a business's definition of a qualified lead as a measure of the cost of its products needs to be factored in. Those organisations with high-value products or services can more easily cover a CPL cost which those with low-cost products may not be able to justify.
Other aspects include reflecting on whether a prospect audience will have short-term or long-term needs or requirements and whether budgets allocated for marketing to existing customers should differ from budgets for marketing to new prospects.
Budgets, timescales, target audiences, reader offers and the marketing collateral available are also variables that can have a direct impact on the success of a campaign. The CPL model takes each of the above factors into consideration before a campaign even begins so that a realistic expectation can projected to eliminate any risk of failure. For example, making multiple marketing assets available to the publisher enables them to stimulate response from many segments of their readership. The more marketing collateral you have available to generate interest, the greater your chances of guaranteed response.
As with all advertising campaigns, better preparation will lead to better results so it's vital to identify precisely what the aims of the campaigns are. By clearly identifying exactly who a campaign needs to reach, only leads that suit particular marketing objectives will be provided.
If you're still not sure whether a Guaranteed Lead Campaign would be suitable addition to your marketing mix, why not contact a member of our experienced team for a brief discussion on your requirements and how a CPL model could be deployed for maximum benefit to your business.
For more information visit http://www.emedia.co.uk
1 http://directmag.com/online/news/cmo-budget-cut-forrester-0709/
2 http://www.ipa.co.uk/content/Q4-2009-Bellwether-Report-out-today-marketing-budgets-reduced-at-even-slower-rate-
3 http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/digital-media/6245277/Online-advertising-overtakes-television-for-the-first-time.html
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