You could be generating hundreds of leads a month… but is that actually creating success for your business?

Sometimes, you don’t need to simply get more leads. You might need to improve the quality of leads or reduce the cost per lead, for example.

Knowing the most important lead generation metrics to track will help you make improvements that result in more sales with lower cost and effort.

Fairly simple.

And while the thought of more spreadsheets may make you want to add a double shot of vodka to your smoothie… improving your lead generation results will bring you surges of dopamine and more money… it’s worth the effort.

Here, we discuss 8 lead generation metrics. You may not need all of them for your specific business. So choose the ones you know will help you move the needle, and then start tracking.

Let’s go!

(but first) What is a lead generation metric?

A lead generation metric is a specific measurement used to evaluate the effectiveness of your lead generation campaigns in attracting and converting potential customers.

They help you understand various aspects of your lead generation process, from cost efficiency to lead value. And are crucial for measuring the success of inbound and outbound marketing campaigns.

Tracking key performance indicators to inform marketing and sales strategy and evaluating the impact of these metrics on generating qualified leads improves conversions to achieve business growth.

9 Lead Generation Metrics

With marketing efforts spread across different channels, gathering data can be a complex task at first. But once you have your reporting system set up, it’s easier to gather and input the results each month.

Here are the most common lead generation metrics:

1. Cost Per Lead

Cost per lead is the total amount you spend on acquiring each lead. Self explanatory.

To calculate cost per lead, divide your total marketing spend by the number of generated leads. A low cost per lead is considered better. However, considering the quality of lead is equally important.

The cost per lead formula is:

Total marketing spend ÷ Number of leads generated = Cost per lead

Where:

• Total Marketing Spend is the total amount of money spent on marketing campaigns.

• Total Number of Leads is the total number of leads generated from those marketing campaigns.

For Example

If you spent $5,000 on marketing campaigns and generated 100 leads, the Cost Per Lead would be:

Cost Per Lead= 5000 ÷ 100 = 50

This means that it costs $50 to acquire each lead.

Understanding how much solar leads sell for can help you gauge your lead value.

2. Conversion Rate

Conversion rate is the number of website visitors, prospects, contact recipients, etc., who took action and moved to the next stage of your buyer journey. This action could be a subscription to your newsletter, a form filled out, downloading an ebook, or requesting a free trial.

To evaluate your conversion rate for a specific action, divide the conversions total by the leads generated and the total number of website visitors, then multiply the figure by 100. A high conversion rate indicates that your business website is effectively capturing leads.

Conversion Rate=(Total Number of Visitors ÷ Number of Conversions​)×100

Where:

• Number of Conversions is the total number of visitors who completed the desired action (e.g., making a purchase, signing up for a newsletter).

• Total Number of Visitors is the total number of visitors to your website or landing page.

For example

If you had 50 conversions from 1,000 visitors, the conversion rate would be:

Conversion Rate = (50 ÷ 1000) × 100 = 5%

This means that 5% of your visitors completed the desired action.

80% of new leads don’t convert into sales. This figure indicates not all leads that you are nurturing today are going to convert into paying customers. It’s worth taking some time to see how to improve your conversions and align your marketing efforts to generate more sales qualified leads.

Use this calculator to calculate the impact of CRO on your website:

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Interactive content is a great way to improve conversions on your website and in your marketing material in general. 

3. Lead Velocity Rate

LVR (lead velocity rate) measures the growth rate of qualified leads in the sales pipeline month over month. It provides valuable insight into your potential revenue growth. 

To calculate LVR, deduct the number of leads at the beginning from the number of leads at the end of a specific period. Now, divide the remainder by the lead at the beginning and then multiply it by 100. A positive LVR percentage indicates that your sales pipeline is growing. 

Lead Velocity Rate (LVR)=

((No. of leads start of period - No. leads end of the period) ÷ No. of leads start period​) × 100

Where:

• Number of Qualified Leads at the End of the Period is the number of qualified leads you have at the end of the given period (e.g., month).

• Number of Qualified Leads at the Beginning of the Period is the number of qualified leads you had at the start of the given period. (e.g., month)

For example

If you started the month with 200 qualified leads and ended with 250 qualified leads, the Lead Velocity Rate would be:

Lead Velocity Rate = ({250 - 200} ÷ 200) X 100 = 50 ÷ 200 X 100 = 25%

This means the Lead Velocity Rate is 25%, indicating a 25% growth in qualified leads over that period.

4. Lead Quality

Lead Quality is often measured using a lead scoring system rather than a simple mathematical formula. However, you can use a lead scoring model to evaluate and prioritize leads based on certain criteria, which typically include demographic information, behavior, engagement, and fit for the product or service. Here's a general approach:

Steps to Measure Lead Quality:

1. Define Lead Scoring Criteria:

   • Demographic Information: Age, job title, industry, company size, location.

   • Behavioral Information: Website visits, content downloads, email opens, social media engagement.

   • Engagement Information: Interaction with sales, attending webinars, participation in demos.

   • Fit for Product/Service: Alignment with target customer profile, budget, need, and timeline.

2. Assign Points:

   Assign points to each criterion based on its importance. For example:

   • Job Title: 10 points for a decision-maker, 5 points for an influencer.

   • Website Visits: 2 points per visit.

   • Content Downloads: 5 points per download.

   • Interaction with Sales: 20 points for a meeting, 10 points for a call.

3. Calculate Lead Score:

   Sum the points for each lead based on their characteristics and interactions.

4. Categorize Leads:

   Group leads into categories such as Hot, Warm, and Cold based on their total score.

   • Hot Leads: Scores above a certain threshold (e.g., 80+ points).

   • Warm Leads: Scores within a mid-range (e.g., 50-79 points).

   • Cold Leads: Scores below a certain threshold (e.g., below 50 points).

Example Lead Scoring Model

Example Calculation:

Lead A:

• Job Title: Decision-Maker (10 points)

• 5 Website Visits (5 x 2 = 10 points)

• 3 Content Downloads (3 x 5 = 15 points)

• 1 Sales Meeting (20 points)

• Budget Fit (15 points)

• Timeline Fit (10 points)

• Total Score: 10 + 10 + 15 + 20 + 15 + 10 = 80 points (Hot Lead)

Lead B:

• Job Title: Influencer (5 points)

• 2 Website Visits (2 x 2 = 4 points)

• 1 Content Download (1 x 5 = 5 points)

• 1 Email Open (1 point)

• Budget Fit (15 points)

• Total Score: 5 + 4 + 5 + 1 + 15 = 30 points (Cold Lead)

Lead Quality Evaluation:

Use this lead scoring model, to prioritize leads based on their quality, focusing your sales efforts on the leads most likely to convert. This helps your sales and marketing resources to be used efficiently by targeting the most promising prospects.

Also, understanding customer lifetime value (CLTV) helps in identifying the best customers and optimizing marketing strategies for higher-value leads.

5. ROI

ROI (Return on Investment) is another vital metric to measure the overall success of your lead generation campaigns, including the average revenue generated per customer.

This metric tells you how much profit is generated from your lead generation efforts.

To calculate ROI, deduct the lead generation campaign cost from the generated revenue, divide the remainder by the campaign cost, and multiply by 100 to get the result as a percentage.

A positive ROI indicates you are profitable. Consistently monitoring your ROI is crucial to identifying areas for improvement.

ROI = (RevenueGenerated−LeadGenerationCost) ÷ (LeadGenerationCost)×100

Where:

• Revenue Generated is the total revenue generated.

• Lead Generation Cost is the total cost spent on lead generation.

Example

Revenue Generated: $50,000

Lead Generation Cost: $10,000

Calculation

1. Subtract the Lead Generation Cost from the Revenue Generated:
   $50,000 − $10,000 = $40,000

2. Divide the result by the Lead Generation Cost:
   $40,000 - $10,000 = 4

3. Multiply by 100 to get the percentage:
   4 × 100 = 400%

Result

The ROI is 400%. This means that for every dollar spent on lead generation, there was a return of 4 dollars in profit.

6. Customer Acquisition Cost 

Customer Acquisition Cost (CAC) is a crucial metric for budget allocation and optimizing marketing strategies. Understanding customer lifetime value helps you assess the long-term profitability of these efforts. CAC shows the efficiency of your sales and marketing efforts by measuring the average cost of acquiring a new customer.

To calculate CAC, divide the total spend on marketing and sales by the number of newly acquired customers. A lower CAC indicates more efficient use of your marketing and sales budget.

Formula:

CAC=Total Cost of Marketing and Sales ÷ Total Number of Acquired Customers

Example

If your company spent $10,000 on marketing and sales in a month and acquired 100 new customers during that period, the CAC would be calculated as follows:

CAC=$10,000 ÷ 100 = $100

This means it costs your company $100 to acquire each new customer. Lowering this cost indicates more efficient marketing and sales strategies.

7. Lead-to-Customer Conversion Rate

The lead-to-customer conversion rate is a key metric that evaluates the effectiveness of your lead qualification and sales processes. It measures the percentage of leads that ultimately become paying customers.

To calculate your lead-to-customer conversion rate, use the following formula:

Lead-to-Customer Conversion Rate=(Number of Customers ÷ Number of Leads)×100

A high lead-to-customer conversion rate indicates that your sales team is efficient in closing deals. For most B2B businesses, the average lead-to-customer conversion rate ranges from 2% to 5%. A rate below 2% signals a need for improvement in sales and lead nurturing processes.

Example

Suppose your business generated 500 leads in a quarter and successfully converted 20 of those leads into paying customers. Your lead-to-customer conversion rate would be calculated as follows:

Lead-to-Customer Conversion Rate=(20 ÷ 500)×100=4%

This 4% conversion rate indicates that your sales team is effectively converting leads into customers, aligning well with the industry average.

To improve this rate, invest in lead scoring to identify high-potential leads. Use targeted content and interactions to keep these leads engaged. Regularly monitor your lead-to-customer conversion rate to pinpoint areas for improvement and optimize your strategies accordingly.

8. Website Traffic

Website traffic is a crucial metric for understanding the reach and effectiveness of your lead generation campaigns. It measures the number of visitors to your site and their engagement with your content. Increased traffic often correlates with higher chances of attracting qualified leads who are genuinely interested in your offerings.

Calculate Website Traffic: To measure website traffic, use tools like Google Analytics to track the number of visitors, page views, and time spent on specific web pages.

Example Calculation

If you want to determine the average monthly website traffic, sum the total number of visitors over a specific period and divide by the number of months in that period.

Example: If you had 3,000 visitors in January, 4,500 in February, and 5,500 in March, your average monthly website traffic would be:

Average Monthly Traffic=3,000+4,500+5,5003=13,0003=4,333 visitors per month

Tracking Website Traffic:

• Number of Visitors: Track the total number of visitors to your site.

• Page Views: Monitor how many pages are viewed during each visit.

• Time Spent: Measure the average time visitors spend on specific web pages.

Source Evaluation: Evaluate sources of traffic to understand which channels (e.g., social media, email campaigns, search engines) contribute the most traffic. This helps identify the most effective platforms for your lead-generation efforts.

Optimization Tips:

• Improve Site Speed: Ensure your website loads quickly to prevent visitors from leaving before the page fully loads.

• Improve User Experience: Design a user-friendly interface that encourages engagement and easy navigation.

• Content Quality: Provide high-quality, relevant content that attracts and retains visitors.

Track and analyze your website traffic to optimize your lead generation strategies and improve the overall engagement and effectiveness of your campaigns.

9. Lead Value

Understanding the value of your leads helps you optimize your marketing efforts and focus on the right prospects. Lead value measures the potential revenue each lead could bring to your business, helping you prioritize high-potential leads and allocate resources more effectively.

Steps to Measure Lead Value:

1. Calculate Average Revenue Per Customer (ARPC): Determine the average amount of revenue generated by each customer over a specific period. This helps you understand the financial impact of acquiring a new customer.
   Formula:
   ARPC = Total Revenue ÷ Number of Customers

   

   Example: If your total revenue for the year is $500,000 and you have 100 customers, the ARPC would be:
   ARPC=500,000 ÷ 100 = 5,000
   This means each customer, on average, generates $5,000 in revenue annually.

   
   

2. Determine Lead-to-Customer Conversion Rate: Find out the percentage of leads that convert into paying customers. This rate helps you estimate the likelihood of a lead becoming a customer.
   Formula:
   Conversion Rate = (Number of Customers ÷ Number of Leads) × 100

   

   Example: If you had 500 leads and 25 of them became customers, the conversion rate would be:
   Conversion Rate = (25500) × 100 = 5%

   
   

3. Calculate Lead Value: Multiply the ARPC by the conversion rate to get the average value of each lead. This gives you an estimate of the potential revenue each lead can bring to your business.
   Formula:
   Lead Value = ARPC × (Conversion Rate ÷ 100)

   Example: Using the ARPC of $5,000 and a conversion rate of 5%, the lead value would be:
   Lead Value = 5,000 × (5100) = 250
   This means each lead, on average, has a potential value of $250.

Why Lead Value Matters:

Knowing the value of your leads allows you to:

• Optimize Marketing Spend: Focus your budget on channels and strategies that attract high-value leads.

• Prioritize Sales Efforts: Allocate your sales team's time and resources to leads with the highest potential value.

• Improve ROI: Enhance your return on investment by targeting leads that are more likely to generate significant revenue.

• Refine Lead Scoring: Use lead value to adjust your lead scoring models, ensuring you prioritize leads that contribute the most to your bottom line.

How to monitor and improve your lead generation results

Monitoring lead generation involves tracking these metrics and KPIs to get a picture of how well you're going. Here it is in a nutshell:

1. Set Clear Goals: Define what you want to achieve with your lead generation campaigns, such as increasing the number of leads, improving lead quality, or reducing cost per lead.

2. Use Analytics Tools: Implement tools like Google Analytics, CRM systems, and marketing automation platforms to collect and analyze data. These tools help track website traffic, conversion rates, and other key metrics.

3. Track Key Metrics: Regularly monitor essential metrics we mentioned above like Cost Per Lead (CPL), Conversion Rate, Lead Velocity Rate (LVR), Lead Quality, Return on Investment (ROI), Customer Acquisition Cost (CAC), and Lead-to-Customer Conversion Rate.

4. Analyze Data: Review the collected data to identify trends, patterns, and areas of improvement. Look for insights into which marketing channels and strategies are most effective.

5. Adjust Strategies: Based on your analysis, refine your lead generation strategies. Optimize your marketing efforts by focusing on high-performing channels and tactics, and address any areas that need improvement.

6. Set Up Regular Reports: Create dashboards and regular reports to keep track of your lead generation performance. Share these reports with your team to ensure everyone is aligned and informed.

7. Test and Optimize: Continuously test different approaches, such as A/B testing landing pages, email campaigns, and call-to-action buttons. Use the insights gained to optimize your lead generation efforts.

Making data-driven decisions to improve your overall strategy is a game changer.

The marketing team plays a crucial role in generating and nurturing leads, measuring the effectiveness of marketing efforts, and driving qualified leads to the sales team.

To Conclude

Imagine knowing exactly where to focus your efforts for maximum impact—how powerful would that be? That’s what tracking the right lead generation metrics can do for your business.

That’s exactly what Goodhart Coffee did to get 100% more bookings in one year. 

By monitoring metrics like those mentioned above, you’re not just collecting data—you’re gathering insights that can transform your strategy and fuel your growth.

It’s time to move beyond guesswork. Dive deep into these metrics, make informed decisions, and optimize your lead generation processes. This isn’t just about attracting more leads; it’s about attracting the right leads, converting them into loyal customers, and driving sustainable business growth.

Ready to take your lead generation to the next level? Start tracking these metrics today.