A big part of growing your moving company is winning new customers. Attracting potential customers is what’s known as lead generation. While leads can come from referrals and reviews, the main way to actively generate leads is digital marketing.
In 2022, digital ad spending worldwide is predicted to reach $441.12 billion – that’s a lot of companies investing in online marketing!
Digital marketing provides small businesses with a tremendous opportunity to reach new customers. But what exactly goes into the cost of a marketing lead?
What Factors Affect Cost Of A Marketing Lead?
The cost of a lead depends on multiple factors including industry, product cost and lead quality. High quality leads, aka buying an expensive product in a highly competitive market, are usually most expensive.
Different sources of lead generation can also have different costs. Search Engine Optimization (SEO), are considered free as there are no direct costs associated with them (for more information on SEO strategy, check out our Mover Masterclass). Social media advertising costs, on average, $58 per lead.
How Do I Calculate Cost Per Lead?
Cost Per Lead (or, CPL) is the most commonly used metric when calculating the cost and overall efficiency of a paid digital marketing campaign. Let’s say you spend $500 on a Facebook Ad and you end up with 25 leads. That would mean your CPL for that campaign is $20.
You can get this by using the formula:
Total amount spent on digital marketing/ Number of new leads from digital marketing
How Do I Calculate Customer Acquisition Cost?
While CPL covers the cost of attracting a potential customer, Customer Acquisition Cost (CAC) is the marketing metric used to measure the cost of actually gaining a paying customer. This metric is also called Cost Per Acquisition (CPA). CAC/CPA is calculated using a similar formula:
Total digital marketing spend / Number of new customers.
For a closer look at what goes into calculating CAC, check out this blog post.
Whether you invest in Facebook Ads, an SEO approach, or another lead source, these formulas can help you calculate the actual cost to your moving company of each lead and customer.
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