I am asked this question all the time. Demand Generation or Lead Generation is one of my main focus. I believe that it is the heart of marketing. All of your activities within marketing are done for the purpose of generating demand. Even Public Relations (editorials, public speaking, articles, press releases), which is a must for most companies and not directly or instantaneously generate leads, are a wing on your lead generation program.

So amongst all of the web activities, third party vendor, lead nurturing programs, branding activities, events and tradeshows, list buying, direct mail programs, and marketing through channels and alliances, what should your cost per lead be? Well, these activities are all different and each of them has different cost per lead ranges. Your cost per lead considered to be great if your overall program ends up to be $6-$75 cost per lead. This is because some leads you will acquire for 50 cent from a list while some from a costly tradeshow for $200. (just an example)

Today we will discuss third party vendor online cost per leads. Check back on the Generation O Blog in a few days to read about the statistics and cost per leads for other types of marketing activities.

Third party vendors are the most popular way of getting instant leads that are somewhat or entirely targeted based on your ideal customer profile. They are favored by sales people because these are leads that through the vendor read something recently about the company and maybe even the products.

For those of you who may be new to third party vendor advertising it works the following way: you give your company’s content (case studies, white papers, educational webinars, e-books, banners, demos, podcasts, articles, or sponsored reports), your company’s description, and your ideal customer description. The vendor will match your content and requested lead type with their network of audience and puts your materials or advertisement across their web network where they offer your marketing material/content to their website visitors or members. They do all sorts of activities such as email marketing to drive visitors to your content. The visitors have to fill out a form in order to get your content. After the vendor captures this information they send you the leads and you can tell who downloaded your material, which of your content, and what may their interest be.

However, the more targeted the program is and the more pieces/offerings are in the package the more it will cost. The vendor will first give you a proposal. Never agree to the first proposed amount. Always negotiate! There are hundreds of vendors so if one do not want your business enough, the next one will. Check back in a couple of weeks as we will be posting a blog about Negotiation Techniques that can save you a bundle. The vendor may include content creation like a flash demo or a special report of some sort and a guaranteed amount of leads. Always get a guaranteed number of leads! This means that if for example you sign up for a two months program and the company agreed to bring you 1200 leads by the end of the program and they only brought you 900, they will extend the program and run some additional special promotions and mailings in order to meet the 1200 leads guarantee. Guaranteed lead numbers are a must because you want to know how much your cost per lead would be in the worst case scenario.

Ok, but how much should I be paying? Let’s get to it. I found that if the program is really targeted then the price can be between $55-120 per lead. If you can do a less targeted campaign meaning you are only looking for IT managers and director level professionals all across verticals then you could get those leads at $25-50.

You have to take some things into consideration. If you are a large company and your average sale price is 20K per deal you can afford a higher cost per lead but if your average sale price is 2K per deal then even a $25 cost per lead may not make sense for you. In such cases there are other activities you can do that may be more time consuming and not as targeted but could yield the same results.

If you are interested in learning more about this subject and looking for some vendors then visit us at www.generationOmarketing.com We negotiated great deals with some of the best vendors in the industry. We tested them and work with them extensively with great results.

According to www.myemma.com and www.constantcontact.com in 2008 the average unique open rate was between 16.39% - 20.31% while the unique clickthrough rate was between 2.30%-3.45%. Do not go into a panic if your numbers were not in the neighborhood of these numbers because they also wary by industries. According to www.bronto.com “Retail Industry” open rates can be as low as 15.9% for example.

I suggest we explore these numbers a bit further because the truth is that you can never get a completely accurate measurement of your email marketing success. Why? Because for example marketing automation tools will count a preview panel as an open email even if the recipient did not really open your email. If you do not set up your automation tool correctly it will also count records that have no email addresses, but were pulled from your database based on your “query”. You may also have duplicate records in your database. Your email tool may look at two emails that are exactly the same and only sends the email once but many times people have several email addresses. You may be sending couple of emails to the same individual under different email addresses and they will only open one of them.

If you are sending out the email as part of an email campaign you may also have a very low percentage per email but a high percentage overall. What I mean is that if you send out 7K emails for example and only 1 percent opens that email but you re-send the same email to the same 7K minus the 1 percent, your open rate will be around 1 percent again. You can send one email out about 4 times 1X per week for example and you will get a very close open rate each time you send the email out. So if your email campaign contains several branches based on triggers or several steps with the same content then you should look at the total number opened from the 7K emails sent. Total the number of emails opened throughout the entire campaign. You may also have a stale database that was not touched for years. In which case your campaign would be considered be more of a “qualifying data" campaign. In such cases you will have lots of email bounces, unsubscribes, students, partners, and customers for example, all of which you may not consider a prospect.

MarketingProfs www.marketingprofs.com reports that amongst 1,224 respondents the top priorities for marketers were average open rate, average clickthrough rate, conversion rate, average unique click through rate, and change in revenue from email marketing programs. I believe that the most important and accurate view of an email marketing campaign is the call to action.

What do you want them to do? If your goal was to take them somewhere and they went there then you succeeded. If your goal or assignment was for your prospects to click on a promotion and they did then your campaign was a success. If your goal was to generate attendance to a webinar and they registered for it, you achieved your goal. So if your percentages are not where the industry standards are there might be reasons for that and you might be able to report on different measurements of success.

Should you need assistance with your database and email marketing activities or marketing automation visit us at www.generationOmarketing.com

Is it a hype or does it really work? Well if you ask the owner of wine library tv or Arianna, they will tell you, yes it does. A couple of months ago I attended MarkeitngProfs Digital Marketing Mixer where Arianna Huffington and Gary Vaynerchuk were keynote speakers http://www.marketingprofs.com/events/5/keynote. Gary said that he spent 20 hours every day on Facebook, MySpace, Digg, Twitter, Pownce and other networking channels in order to build his business and encouraged us all by telling us that anyone can do it.

While I loved his presentation and got very inspired by it, I disagree. I do not think everyone can do it. Not only you have to spend countless hours chatting with thousands of people, you got to be lucky, and have the charismatic personality Gary has. Most people are on Twitter and LinkedIn and other social channels because “it is the thing” to do and you are last week’s news if you are not keeping up and have some sort of presence in these places. Most marketers do social marketing because Generation “O” is a new audience that communicates differently. They are not doing it because they see revenue from it or because they want to make friends with their 900 followers. Generation O wants to interact and it makes sense to be in front of them where they would see you. Generation O wants to forward things that are entertaining, follow people through social network sites, they love to broadcast their opinions and want to hear what others have to say.

While as a marketer I would not spend 20 hours on social marketing and put all my eggs in one basket, I think social media should be incorporated into an overall marketing plan. Since there are no guarantees and you would be hard pressed to show ROI on such activities, there are some tools that can help you manage social network activities and blogging. If I could suggest one thing, it would be to keep your expectations low and do it for the fun of it and to achieve a more well rounded marketing plan. If you need help you can visit us at www.generationOmarketing.com

Who’s fault is it anyway?

So you did all the multi module marketing, you are killing yourselves with the million pieces of SEO, lead nurturing, online advertising, events, social and viral activities in order to bring in the best possible leads for your sales team. You are stepping out and become everything to everyone including a database admin and web master and doing several people’s job while many, who do not live in the marketing world and not know how complex marketing had become, are thinking that marketers are running around with crayons and not doing anything but creating pretty things.

Some time ago when sales were asked by upper management why they were not meeting their numbers, the answer was always that marketing is not doing much to help and the few leads they get from marketing are not any good. Now that there are metrics that show numbers and actions of leads, sales’ response is that the leads may be the right contacts and may have read something about the company or products but they have no current projects, thus they are still not good.

So we arrived to the point where marketers not only have to do the million different activities to bring in leads from various avenues, show metrics, roi, but now those leads have to be instant opportunities as well. Many marketers are confused by this. Why? Because marketing is described as “the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large”. To bring opportunities instead of leads to sales would mean that marketers would have to do some initial persuasion to get the leads ready to be opportunities, which is actually selling. According to Wikipedia selling is the art of persuasion. “Contrary to popular belief, the methodological approach of selling refers to a systematic process of repetitive and measurable milestones, by which a salesperson relates his or her offering of a product or service in return enabling the buyer to achieve their goal in an economic way” http://en.wikipedia.org/wiki/Selling Which I believe would mean that a lead, even if it does not have a current project, would qualify if other attributes were met and the “systematic process of repetitive milestones” that needs to be done before an actual “sale”, would be selling, which should be done by sales.

But let’s look at this from the sales point of you. Upper management is hard on sales. They are only good as their last accomplishments. Even if they sold millions last year, if they do not make their numbers this year, they are out the door. Even the best of the best sometimes “hate” selling and making cold calls. Many are doing it because they are driven by the money but not because they LOVE it. Usually, the best sales people’s personality is just that, sales people. Meaning that they tend to be smooth talkers who can persuade others, if that does not work then they may switch to arrogance, or intimidation. The most successful sales guys I know are extremely smart and they are always a step ahead. So when these guys are asked by upper management what’s up, it is not a shocker that they would use any means of defending themselves and try to win some time until their next big win.

In addition, the expectations from sales many times are unrealistic. I know sales people who have daily quotas. When a sales person is pressured to make a daily quota they are busy “push selling” not building relationships or following the “systematic process of repetitive milestones”. If they have to meet a quota for a certain number of calls and activities then they will do a 5 minutes call that would not allow them to understand anything about their customers, their needs, how the product they are selling would fit within those needs, etc. The only thing they would be able to do is push the product from the get go and most of the times be turned away.

It is not the leads or sales that is the problem. The problem is that as marketing, sales is changing as well. Buyers got smarter and they no longer want the old type of car sales man selling to them. The management of an organization need to realize who this new audience is and allow their sales people time to create a relationship and spend enough time with prospects to discuss their problems.

In conclusion, in most cases both marketing and sales are doing everything they can. It is not one or the other’s fault. There are other things to be considered such as upper management, directives, the economy, and evolving consumers.

If you are looking to unify your marketing and sales department and need some tools or have training needs please visit us at www.generationOmarketing.com