subject: CR or Close Rate & CPL or Cost Per Lead [print this page] CR or Close Rate & CPL or Cost Per Lead CR or Close Rate & CPL or Cost Per Lead
In this post we will cover to KPI's the Close rate or CR and Cost per lead or CPL, both are important KPI's in internet marketing. The Close rate or CR is the ratio of leads that turn into customers and Cost per lead or CPL is the amount that it costs to get a lead. These to KPI's go hand and hand and also can be used closely with the CPA or Cost per action. In my experience in running a small online business I found the CPL and CPA to be the most valuable and frequently used KPI's.
Close rate or CR the ratio of how many leads turn into customers, you can also have a close rate for an action as well. For example if one of your CPA's is to get people to subscribe to your mailing list, then you can have a close rate for that. Typically you will have as many CR's as CPA's and they will give you a little more insight into how well your internet marketing is doing.
Calculating the CR is very easy, the formula is below.
Number of customers or action ____
/ Divided by
Leads or visit to your site _____
X Times
100
= Equals
CR % ____
I recommend using the CR for a number of things phone calls, visits to a website, CPA's and totals sales. It is always good to know the CR and it will let you know where things can be improved, changed or giving up on in your business.
CPL or Cost per lead, now we are getting down to the brass tacks of business how much will you pay for a lead? Well if you know some other KPI's in your business like Customer lifetime value or CLV and CR or Close rate you probably have a pretty good idea of what you would be willing to pay per lead. The CPL good to know in a lot of marketing you will have an idea on its return and how much it costs, so if you know your CPL you can determine if it is going to be worth your money or not.
The formula for calculating your CPL is below, if you don't know what some of the KPI's are you can refer to my other posts.
Cost per action or CPA _____
X times
Close rate or CR ____
= Equals
CPL _____
Both the CPL and CR are important to know and will help you in your internet marketing efforts. If you have been reading all the posts in this series I hope you have begun to see how it all fits together. Internet marketing can be fun, especially if you like learning and numbers.
