Measuring Conversions for Lead Generation Sites

Does your company sell a service or a product with a long selling cycle? If so, your web site is likely a lead generation site. To measure the effectiveness of your advertising campaigns, it is imperative that you know the value of each web site lead. Here’s how…

Let’s assume that your web site has a contact form that visitors fill out online. In this instance, a conversion would be a successful completion of your form. Now you need to know the following:

1. Historical count of contact forms filled out (conversions),
2. Number of contact forms that lead to a revenue event,
3. Value of each revenue event.

Let’s look at an example of a real estate agent. She reviews the forms filled out over the past 12 months and counts them all up. [To make it easy, she has kept all of the inquiries in a special folder in her email application.] She then reviews the number of houses she has sold over the past year and identifies which of those clients came through her contact form. Now she knows:

• Her average revenue event (commission) for a home sale was $10,000
• 1 out of 50 people who filled out a form ultimately bought a house from her, for a conversion rate of 2% [1 divided by 50 times 100]
• Therefore, the value of each internet lead is $10,000 x 2% = $200

That means that every contact form that shows up in her inbox is potentially worth $200. Now she can easily see if her PPC campaign is paying off. For example, if her PPC cost-per-conversion is $125, then she’s only paying $125 for a lead worth $200. That’s a 60% return on investment (ROI). It’s clear to see the value.

Using a web site statistics program like Google Analytics, you can do this with your SEO campaign, as well. Let’s say you spent $5,000 on SEO work to get a top 5 ranking for “Raleigh real estate”. How many leads did that new search term ranking bring you? Was it worth $5,000? You don’t have to guess.

So start keeping track of your number of forms filled out and determine the value of a new customer. Then you’ll never have to wonder, “Is my PPC campaign paying off?”

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