Is $300 Per New Lead Expensive?
What do you think of the above results?
Keep in mind that the last quarter of 2024 was insane in terms of online advertising. In addition to typical Black Friday and Christmas promotions, it was competing with a presidential election.
This is the perfect storm for online advertising costs…
Frankly, I have no clue whether the agency was doing a good job, which is beside the point.
One thing you can be sure of is that costs per lead are only going up.
And If you’re spending this kind of money on online advertisement, you must look beyond the horizon.
In fact, you should do this regardless of your advertisement budget.
What do I mean by this?
I love online advertisement, but there’s only so much you can improve on the campaign side of things…
Yes, if the strategy is wrong, the changes can be dramatic…
But I like to assume agencies have their act together; some do, and some don’t.
As a business owner, it’s your job to separate one from the other.
But... Agencies can get expensive, and unless your spending heavily it's very easy for an agency retainer to eat whatever improvements they're generating...
But there's a better way on...
How to look at online advertisement (PPC or Pay-Per-Click)
Instead of spending 80% of your time determining whether $300 per lead is too much, I believe most efforts must be made to ensure it’s worth it.
You already paid for that lead; it’s your job to make sure it converts.
Let’s say you get 300 leads at $300.
Typically, 10-20 percent will book a call, and 5-10 percent buy.
That means: 30-60 sales calls
Which translates into 1 to 6 sales
And here lies the problem…
Now, let’s say we’re able to improve your conversion results by 10% (not a lot, right?)
Where 11-22 percent will book, and 5.5 to 11 percent will buy.
This means: 33-66 sales calls
And 2-7 sales (one more than before)
Not a lot, right?
Wrong!
If you sell $300k packages, that’s an extra $300k in sales (per month!) or $3.6mm per year…
Small actions, big results.
AOV plays a significant role on your advertisement strategy
More AOV = good
AOV stands for Average Order Value
And this is an often overlooked way to improve your advertisement strategy...
We figured that we’d need an AOV of $300,000 to make money on $90k ad spend (assuming direct and indirect costs; this depends on your business model)
Let’s say we could slightly improve your AOV, say 10%.
For $90k in adspent,
you’d get $300k to $1.8m in sales, which is decent on the lower and pretty good on the upper end.
Now, compounding small actions and improving your AOV to $330k (10% increase)
We’d be looking at $660k to $2,310 mm for the same $90k, which is stellar in both cases.
Are you curious to understand how the numbers run for your particular business?
You can schedule a Digital Strategy Audit here.
Now...
If you sell something for $300,000, how quickly do you give up on your leads?
Which begs the question…
How do you disqualify your leads?
And this is the real challenge.
And where our Jetivize Marketing Machine™ sets us apart.
You can’t just run ads…
… you need to generate, nurture, and qualify leads with a long-term strategy.
Note: of course, you might have better conversion ratios, which will lower the AOV you personally need to make it economically viable, the concept of improving AOV remains.
Each business is unique.
The Strategy to Reduce Advertising Costs
Selling something for $300,000 takes significant resources.
What if you could both qualify and easily (automatically) sell something to your leads?
You could be getting leads basically for free; this is called a front-end offer.
In addition to offsetting your advertising budgets, it will help you qualify and experiment with a psychological effect called laddering.
Laddering: When a small yes leads to bigger yeses.
You can do this through email, ads retargeting, and SMS campaigns.
Which are cheap and automatic ways of paying for your leads.
But this is something your typical agency won’t offer.
You’d get it from a strategic business partner, not just an advertising button pusher.
But there’s more…
And your typical lead gen agency won’t do it for you either...
It’s called Lead ranking
Because as you nurture your leads, you also need to rank them.
This way, you focus your resources and efforts on leads more likely to buy from you.
When selling luxury B2C, you never know who’s behind an email, so you need ways to automatically rank your leads, by measuring engagement, interest, etc.
The best way to do this is through email marketing, the better your email marketing strategy, the more data you’ll have to make intelligent decisions.
Savvy businesses and salespeople know
That great Digital Marketing requires strategy
So does your client acquisition.
Instead of deciding whether a campaign is expensive at the end of the quarter, you could consider longer periods, such as one year or even more.
Because a follow-up should end with a sale or an unsubscribe.
If you pay $300 or even $5000 for a lead, it doesn’t matter how long it takes to convert (as long as you still have a business).
And nothing makes your business stronger than...
having a pipeline full of leads nurtured and connected with regularly...
...until they come looking for you.
It’s important to take time to create relationships.
To connect deeply through your company’s unique stories and experiences.
Instead of “my leads suck” or “my leads are too expensive,” shift towards “someone gave me their email, I will follow up until they buy or they unsubscribe".
Because great Marketing leads to closure, you do this by attracting the people who relate while repelling the ones who don’t.
To do this, you:
attract a large number of leads and select them later or,
pay a premium for better leads…
I believe the first one is economically sounder and scalable.
An unsubscribe is the only way to disqualify an online lead, because when we communicate our offer properly, the audience does the qualification.
The Role of CRM in lead qualification and conversion
If you receive hundreds of leads each month, you can’t possibly keep up with direct personal outreach (which you should do to your best leads).
A good CRM will allow you to:
perform email and SMS marketing
connect marketing and sales teams
create and manage sales pipelines
generate automatic notifications to your team
automate as many repetitive tasks as possible (salespeople should be selling most of the time)
Score your leads based on engagement
Besides all that, our Jetivize Marketing Machine™ allows the following
creating landing pages, forms, and surveys
website design
calendar management
AI conversation: for bookings, customer support, and even qualification and sales
online sales and invoice management
ad campaign management and reporting
Social media posting and management
AI: content creation, funnel creation, website design
It’s a one-stop shop for everything you need to make your online sales profitable and scalable.
With the benefit of the support from our team, our strategic vision and insight make this offer unique.
So… is your customer acquisition expensive?
Is customer acquisition a bottleneck for you?
Are you unsure of your next steps?
Do you need an expert opinion?
Take our Free Digital Audit, you can apply here.
And gain clarity on where to focus to make your business more profitable while you make time for the aspects of your life that really matter!
We’d love to help you by creating an A/B test for your customer acquisition, with or without the Jetivize Marketing Machine™.
We offer this risk-free because we know the results we can provide you.
