The true value of a qualified contact for your eCommerce is much higher than you think. In this article you will find out how to measure it concretely…
In web marketing, facts count more than words and the value of leads therefore counts much more than any abstract discourse on their importance.
Because the value of an already acquired customer is very simple to measure for any ecommerce e signature, while that of a qualified contact varies according to the path that has led a company to conversion.
The web is chock-full of articles that magnify the importance of leads for online store success. But how many know how to give a dimension to this value? How many try to measure it concretely?
No complex formulas: calculating the real value of a lead is less complicated than one might think.
But before going into the calculation that will allow you to find out how much a lead is really worth for your ecommerce, a premise is a must that allows you to follow all the reasoning in the best way.
Acquiring a lead is more than having a potential customer
Acquiring a lead does not only mean acquiring a potential customer who, perhaps, will be able to convert into a customer but means accompanying a contact that is really interested in the products or services of your company until the final purchase .
At that point you will have much more than a casual customer: you will have a satisfied customer who, in all probability, will buy from you again.
But let’s take a step back.
What does it mean to accompany your potential customer at every stage of the purchasing process? It means overturning the paradigm (by now outdated) according to which you are trying to conclude a sale.
Forget about the sales process and focus on the purchasing process from your leads. Qualified contacts means people (or companies) who are interested in your products and therefore know in part your industry and the products they need.
They are conscious users, sometimes even competent. Trying to sell them a product with the classic marketing techniques of a few years ago would be a “commercial suicide”.
That’s right, you read that right, I talked about commercial suicide.
The focus of the most powerful and effective digital marketing strategies is not the sale but the purchase. And if you want to achieve something more and better than sporadic sales, but acquire satisfied customers who come back to make purchases from you and maybe even recommend you to friends and colleagues, you have to make their experience with your perfect brand.
For this you have to offer presence, competence and content at every stage of the purchasing process that starts when a lead “lands” on your ecommerce homepage or on one of your product pages and ends when this contact makes the last purchase from your company.
How to really calculate the value of a lead
Having defined this premise, we move on to the numbers. Getting a lead has a cost.
A cost that is measured through the marketing and advertising actions that have led this person to land on your site. Obviously every sector, every customer and every circumstance requires different actions. Actions that, to be successful, must be part of an overall strategy.
For the moment, however, let’s focus on the fact that thanks to the web the cost of a lead is easily measurable. From Google tools to other software, it’s easy to determine how much a lead costs a company.
If, for example, the only action I take is advertising via Facebook and I invest 100 euros in advertising, the social insights will clearly show me how many of the people or companies reached by my ads have then clicked on visiting my business website.
So we find out that 20 people really interested in my products or services have visited my site and contacted me for more information or a request for a quote. It therefore means that each lead cost me 5 euros. 100 euros invested divided by the 20 leads won.
100: 20 = 5
So far, the calculation is very simple.
But let’s move on. Because the cost of a lead does not determine its value!
How much is the product that these contacts are interested in?
Let us assume that the cost of the product is 30 euros.
We could conclude that, since it cost us 5 euros to acquire a lead, when this contact is converted into a customer and purchases the product, its value is 25 euros:
30 – 5 = 25 euros
But is it really so? No
Because the value is extremely superior. If we have accompanied the user correctly at every stage of the purchase process (through lead nurturing strategies) we have not a casual customer but a loyal customer who will buy from us again.
Here then is the lead value increases. And it increases not only for a calculation of the probabilities, but because when it returns to buy, being already educated and aware of both the quality of the products and the value of our brand, we will have the possibility of proposing new and more “profitable” strategies of upselling and cross selling, to further increase the value of our offer.
We can therefore, roughly but not too much, say that a satisfied customer has a value much higher than those 25 euros.
Everything depends on the product sector, but we can still estimate on average 2-3 purchases that a satisfied customer makes from a company he knows in a reasonable amount of time.
If you bought 3 products for 30 euros, then its real value would be 85 euros for an initial investment of just 5 euros.
90 – 5 = 85
It means realizing something like 17 times the initial investment. Not bad, don’t you think?
This simple calculation shows you how to acquire leads is fundamental for any business, especially for ecommerce.
It is precisely online stores that can no longer afford to wait for customers to “fall from the sky” in an increasingly competitive and selective global scenario.
Most e-commerce businesses close after a few months or struggle to stand up. Having an activity that yields a few hundred euros every month, compared to the time and effort that you as an entrepreneur do every day to carry it out makes no sense.
The road to a constant and lasting entrepreneurial success is only to offer your business a constant flow of leads that can guarantee, in the face of an initial investment, profitability and reliability over time.
It did not turn out that any marketing agency is able to reach because it is not a result obtainable through any lead generation campaign.
We need a system designed and tailored for ecommerce and for those who manage online stores.
I’m talking about a dedicated and optimized Funnel in order to make the most of every lead, just like the Lead Commerce system developed and implemented by the Corporate Web Marketing team. A strategy that defines each phase of the funnel process so as to select all the best qualified contacts, those who have the greatest chance of being converted into end customers. Without wasting time and money on useless tests or strategies that “shoot in the pile”.
The law of large numbers does not work with ecommerce. There is too much competition and too much selection to be able to focus only on quantity, relying on random variables.
Kelly Madison is a specialist in content marketing, she has a vast experience in writing different content on various topics. Currently she is associated with the leading Ad Film Production Houses in Dubai. In a meantime she also manage her own blog and reading books.