Transcript
So when your marketing agency says cost per lead, or you’re in a Facebook group and you hear someone say cost per lead, what does that actually mean? Well, in this episode we’re going to talk about exactly that. So what does cost per lead mean? Well, depends on what you’re tracking. So, ultimately, from a business perspective, a cost per lead is going to be someone who is inquiring about your business. A qualified lead would be someone in the attorney space, someone calling for a representation, that comes to mind. So, as a business owner, that’s what you think of the cost per lead, or someone submits a form on your website for representation or to ask a legal question.
When it comes to marketing though, sometimes that gets a little bit gray depending on the marketing agency. So, when it comes to cost per lead and you’re working with an agency, it’s really good to clarify, what does that mean? So, for example, going back to the attorney example. For our attorney clients cost per lead will include anyone who submits a form on the website or makes a phone call. And we track those by having, the simplest way is if someone submits a form on a website, they go to a custom unique thank you page, and we track how many people visit that page, and we count it as a lead.
For phone calls, we use CallRail. CallRail, dynamically swaps out the phone number on your website and then gives attribution to the source of that call. So if they come from Google Ads, and they go to your website, and they make a phone call to any of the one that we use for phone numbers and the keyword pool, it will then give attribution to the Google Ads. But if they come from social or Yelp or Google My Business, the attribution will go there.
So that’s what we classify as a lead. We can’t as a marketing agency decipher in our reports quality leads versus not quality leads. So there’s always going to be a certain percent, the less, the better, but there’s always going to be a certain level of spam calls, missed calls, wrong number calls. For forms we’ll always see other marketing agencies trying to do cold outreach and get your attention and they’ll classify as a lead. So it’s really hard to define quality leads versus lead. But then what would we do is going back to Google Ads, that data dynamically populates Google Ads, and we get what we call a cost per lead.
So it’s, how much did you spend in that campaign or in that ad group or for that keyword to get that lead? So, if you’re looking at, let’s say, you’re spending $2,000 a month on Google Ads and you get a hundred leads, your cost per lead is going to be $20 a lead. Going to guess on the lower end, let’s say, 20% of those are crap. You can then do the math to figure out the cost per quality lead. What we do though is, for some of our clients tied into their CRM, and then we can actually get a good idea based on the client’s feedback. What if that quality lead actually is quality? And we will internally listen to CallRail to the recordings.
There’s some legalities around that, but I’m not going to get into that. We’ll listen to the CallRail to see the quality of calls. So, that’s what a cost per lead is. Now, where you have to watch, is make sure that when you’re talking to your agency, that you’re talking about the same things. Because what the client talks about for a lead may be different from the agency. I’ve gone into Ad accounts to audit them and seeing the agency is tracking unique page views for a very particular page on the website as part of the conversion action or part of the customer journey. They do that because they want to tell Google that they want more people that visit that page. That, that page in particular is gathering people that are very important that we want to tell the algorithm to give us more. That’s good. That’s what they should be doing.
But if you look at the metrics and then you’re saying, “Well, this is a cost per lead,” but they’re actually only tracking, they’re not actually leads, they’re just people who visit this particular page. Then the client gets the wrong idea of what their cost per lead is because they’re not actually leads. They’re just trying to get the algorithm to work appropriately by telling the algorithm to track more people that hit this page. We’re counting this as a conversion. And then the algorithm goes out and gets more people like that. But if that’s not explained to the client then they have the wrong idea of how many leads they’re getting.
So, it’s really, really good to know what your cost per lead is. Ultimately it is the advertising agency responsibility to get you leads really, make sure that both parties are on the same understanding of what a lead is. If you don’t know, ask them. And then, always one of the things I always ask when I first talk to clients is, how’s the quality been? And they’ll tell me, right? Whether it’s being good, better, ugly, and there’s different ways that we can go about adjusting. So that’s what a cost per lead is. Hopefully that makes sense. If you have any questions about that, leave it in the comments below.
