- What is lead nurturing?
- What are the benefits of lead nurturing?
- The ROI of lead nurturing
The ROI of lead nurturing
The ROI of lead nurturing depends on a number of things: your industry, your solution, how much nurturing content is at your disposal, and, of course, your consistency with lead nurturing programs.
That said, based on our experience in the IT industry, you can reasonably expect that 20% of your nurture leads will convert to sales-ready leads within 12 months.
Other statistics commonly referred to on the Web include:
- Marketo
“Companies that excel at lead nurturing generate 50% more sales-ready leads at 33% lower cost per lead.”
- Brian Carroll
“Proper lead nurturing programs can yield anywhere from 15% to 200% in additional, new qualified leads.”
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Eti sales
Our statistics reliably indicate that for every 100 or so prospects nurtured in the prospect pipeline, some 20-40 more sales-ready opportunities will be rendered over time. (Yes, +20%.)
Three simple exercises to determine the value of lead nurturing for your business
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Do you have a leaky sales funnel? (show/hide)
Whether you use a CRM solution or simply keep track of the leads in your sales funnel on an Excel spreadsheet, go back to your sales funnel from 12 to 18 months ago, and call each and every lead that was in the funnel at that time. Since then, how many have bought a product or service from you? From a competitor? How many still intend to buy? When is the last time one of your sales people followed up with them? Sales professionals often drop the ball after three or four follow-up calls, whereas a lead nurturing program allows them to recycle stalled leads, putting marketing in charge of monitoring any activity that indicates that the prospect is breaking away from the status quo.
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Do you already invest heavily in lead generation activities such as telemarketing, trade shows, seminars or other events? (show/hide)
If those activities are your primary source of leads, your cost per qualified lead is probably high. Research indicates that up to 80% of your marketing budget goes to waste simply due to a lack of discipline or follow-up. Nurturing the long-term leads you discover through various lead generation activities allows you to increase the return on your lead generation dollars. See our Lead Nurturing ROI Calculator below.
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Do you ask your sales representatives to generate their own leads? (show/hide)
Assuming this takes 2 hours of her day, the cost of asking a seasoned sales professional, whose salary is $100,000/year, to generate her own leads would be $25,000. Not to mention the opportunity cost of forgone opportunities, which is the cost of not spending 25% of her time on activities that could generate more revenue for your organization.
Try Our Lead nurturing ROI Calculator
Let’s assume that every year you invest at least $50,000 in various lead generation activities such as telemarketing, trade shows, events, etc., and that you generate three times more long-term leads than sales-ready leads. By nurturing the long-term leads, you can reasonably expect that 20% of them will convert to sales-ready leads within one year, allowing you to both increase your total revenue and the return on your lead generation dollars.
And this is only the beginning. In the example provided below, we kept the same sales conversion rate and same average deal size, but research indicates that lead nurturing typically increases your sales conversion rate and your average deal size. Indeed, as you provide more meaningful and valuable content on a regular basis, prospects increasingly perceive you as a trusted advisor and become less sensitive to price.
| Without Lead Nurturing |
With Lead Nurturing |
|
|---|---|---|
| Lead Generation Costs | $50,000 | $50,000 |
| Lead Nurturing Costs | $0 | $14,000 |
| Number of long-term leads | 150 | 150 |
| Number of sales-ready leads | 50 | 80 |
| Cost/lead | $1,000 | $800 |
| Sales conversion rate | 20% | 20% |
| Number of new customers | 10 | 16 |
| Average deal size | $20,000 | $20,000 |
| Total revenue | $200,000 | $320,000 |
| ROI | 300% | 400% |
Do you own math.
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