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Thursday, 17 April 2014 00:00

How to Cut Your Marketing Cost-Per-Sale

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Much attention is paid to the cost per lead in B2B lead generation. However, what’s more important is the cost per sale. After all, that’s the outcome you’re seeking.


Let’s say a company sells technology solutions to operations managers. Its marketing and advertising efforts result in a list of 200 leads that costs it, for the sake of simplicity, $5,000. The company shares these leads with its sales people based on their territories. The sales people follow up and walk away with five closed sales. When you divide five into $5,000, you come up with the cost of $1,000 per sale.

How to Get More Sales Out of Leads

There are, of course, steps the company’s management could take to reduce the cost per lead by making better use of them.

 Instead of sending all the leads directly to their sales force, they could put some inside sales people on the phone to qualify the leads. If they don’t have their own team, they can outsource this task to a qualified tele-services company that makes calls like these every day.

By talking with leads one-by-one, the tele-services agents may determine that 30 are qualified according to BANT criteria (budget, authority, need, and time to buy). So they only pass these qualified leads on to the sales people. The reps, excited to have qualified leads, charge forward and close 15 sales.

Now they’ve closed 15 sales instead of five – how could that be? Aren’t they the same leads? The truth is that the sales people didn’t follow up on all 200 leads. They checked out a few of the leads, found some that weren’t interested or could not afford the sophisticated technology, and quickly moved on to something they considered to be more important.

But that is not the end of it.

The company’s tele-services team also found another 70 leads who are interested in the technology solutions, and have the budget and authority to buy. But given their multiple priorities, they were not ready for the solution then.

They were not ready yet to move forward.

Over time, the tele-services team worked with these people, calling them to offer advice and sending emails with offers of white papers, e-books, webinars, and case studies that could educate them and help to move them through the buying process. They developed deep relationships, and 40 of these leads matured into sales qualified leads, of which 20 turned into sales.

Obviously the company added some costs for qualifying the leads and nurturing them, but now they’ve closed a total of 35 sales through lead qualification and nurturing instead of the original five. What’s more, the 20 sales leads that were nurtured led to larger sales. And those clients ended up remaining loyal for longer than the clients who did not go through the nurturing process. After all, that’s what typically happens when leads are nurtured with the human touch.

To recalculate the cost-per-sale, company managers would have to add the costs of phone qualification and nurturing to the original marketing costs, but with 35 sales instead of five, they’ll most likely discover a much higher return on investment (ROI).

For more information download our FREE e-book: Bridge the Divide Between Sales and Marketing.”