If you spend $1,000 on a lead gen campaign and get 250 leads, that’s a cost per lead of $4, right?
And, yeah, I know what you’re thinking: “That’s a bullshit clickbait title, Oli.” Thing is, not only is it completely true, but the impact of this mistake is countless ROI calculations that are totally incorrect. A quick LinkedIn search for roles in marketing and advertising produced 2,282,979 results in the US and Canada alone. How many of those people are presenting the wrong numbers to their bosses and clients?
To understand what’s happening, we first need to consider how it’s happening—and why.
The Three Levels of Marketing IQ
The theme of this year’s CTAConf in September is Marketing IQ, and one of the concepts I’ll be talking about in my keynote is the three levels of marketing intelligence—each of which manifests its own version of how lead generation is done and measured.
Low IQ Marketing
This is spammy marketing that chases leads at all cost—”hacks” and “tricks” that deliver a really poor experience and produce results that aren’t useful. These are techniques that have no business in the operations of a respectable marketing team or an organization with strong core values.
Fixed IQ Marketing
This is marketing that’s good, but doesn’t go deep enough. You might have a great landing page, but you’re only measuring success by the conversion rate or the number of conversions—both of which are great metrics that are unfortunately incorrect. This leads to the inaccurate ROI calculations I mentioned earlier.
High IQ Marketing
This is marketing that takes things to a new level, going past surface-level findings to understand the true value of your generated leads. High IQ marketers apply a more intelligent method to calculating their ROI, which I’ll get to in a moment.
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What Does Marketing IQ Look Like?
Here’s what I mean. All B2B lead gen campaigns will produce two types of leads that aren’t actually leads.
- Spam email addresses from form-filling bots.
- Fake email addresses from people who don’t want to be put on a list.
With this in mind, if you don’t go through your leads list and clean out the bad data, your conversion rate calculations (and hence your ROI calculations) are incorrect. You may have software to do this, which is great—but often you’ll just be working with a spreadsheet. That means you would need to manually go through to calculate how many of your leads aren’t real.
For instance, I recently ran a campaign (let’s call it Campaign X) in which 3% of the leads were spam and 8% were fake. Worse, another 36% were personal Gmail, Hotmail, and Yahoo! email addresses, which don’t represent the ideal type of leads for marketing B2B products.
In this scenario, a low IQ marketer wouldn’t even notice (or care, frankly) that a third of their leads are junk. A fixed IQ marketer might remove the 11% (3% and 8%) of bad form fills and recalculate their conversion rate—a step in the right direction, but we can do better.
We need to think like high IQ marketers. We can improve the way we optimize our campaigns by going beyond conversion rates and considering micro metrics.
High IQ Marketing: Using Micro Metrics to Optimize Smarter
Micro metrics are a more nuanced look at what’s happening in the campaign experience. They provide us with alternative ways to measure performance—beyond the top-level conversion rate.
In Campaign X, we can consider the following three values as micro metrics that can be individually optimized:
- The percentage of spam email addresses entered by bots.
- The percentage of fake email addresses entered by humans.
- The percentage of professional or branded email addresses.
In regard to the metric #3, a branded email address is one that includes the company you work for (like email@example.com), as opposed to your personal email address (such as firstname.lastname@example.org, my first and long inactive email address). This is important, because having someone’s branded email address means that you get to see which companies are signing up. Plus, when you do your follow-up email marketing, you know you’re contacting someone when they’re thinking about business (rather than sitting on the toilet checking their personal email).
If you wanted to optimize the landing page in Campaign X, you’d go through some of the normal steps of doing research coupled with ideation around possible improvements—but you might not have a strong starting position in terms of focus. By zeroing in on the micro metrics, we know exactly which aspects of behavior we’re trying to influence.
High IQ Marketing: Micro Metrics in Practice
Using micro metrics, I’ll walk through some of the optimization ideas that I implemented in Campaign X (and how they performed in an A/B test).
Optimizing Micro Metric #1: Spam Emails
In this instance, you could add a CAPTCHA or honeypot to try to prevent the spam bots getting through, but I decided to focus on optimizing metrics #2 and #3 as they presented larger opportunities.
Optimizing Micro Metric #2: Fake Emails
The goal of Campaign X was to gain access to a free landing page course, but people were entering fake emails hoping that they would get access regardless. (They did—it redirected them to the course after the form was submitted.) To fix this problem, I added a simple statement beside the email field that stated: “Enter the email address you’d like us to send the course link to.” People felt that they had to add a real email address in order to continue.
Impact: The number of fake emails dropped from 7.9% to 5%—an improvement of 36.7%.
Optimizing Micro Metric #3: Branded Emails
For this one, I leaned on some experimentation I did a few years ago where I tested changing the label on the email address field. In my research, I found that by rewriting “Email Address” to say “Business Email Address,” the number of branded emails went up by almost 60%. (I guess you get what you ask for.)
Impact: When I leveraged this research and applied it to Campaign X, it helped increase the number of branded emails from 66.4% to 80.8%—an increase of 21.7%.
What Can We Learn from Micro Metrics?
Earlier in my career, I’d look at a page and try to find things I could make “better” (which was largely subjective, even though it was based on 20 years of web experience) and it limited my number of successful A/B tests. By following a micro-metric approach instead, I’ve been able to learn faster and win more because I’m focused on behavior rather than perceived motivation.
If you want to improve your marketing through a better understanding of your true lead gen conversion rates, I’d suggest the following:
- Do the manual labor of clicking through every lead you have—then count the percentage that are spam, fake, or personal (rather than branded).
- Adjust your conversion rates and conversion counts accordingly.
- Compare your new results to what you were previously reporting and communicate the correct numbers to your stakeholders.
- Set up some micro metrics based on your observations and try to optimize specifically for them (rather than making the whole page “better”).
The simple but arduous task of manually inspecting your leads can provide a ton of insight that will inspire (or depress) you, depending on what you find.
I’d love to hear your thoughts in the comments!