Measure & Track Your
We explain the differences between Cost-per-Click, Cost-per-Lead, Conversion Rates & Click-Through Rates
Cost per Lead vs Cost per Click
Your real focus should be on a cost per acquisition cost of the lead
It’s hard not to focus on a metric like a cost per click. It is all the online marketing guys talk about and if you do your own campaigns it stares you in the face every time you do keyword research or adjust your bidding.
If a keyword term costs $5.00 per click, and another term costs $12.00 per click which one fo you choose? CPC is one of the first metrics you have thrown at you in the PPC world. But you also need to know that it’s only a small piece of a very large, complex pie.
If you review the charts you will note the following metrics need to be applied:
• If we use the cost of saying the industry average of $2.32 per click and you get 1000 clicks for the month.
• Now take the average click-through rate of 1.91% and then the call or conversion rate in as per the industry average as set out below of 2.70%
• This 1000 clicks cost $2320.00 of those 1000 clicks we had 1.91% go to your website You now have 19 site visitors and or an overall coverstion rate to a real lead of 2.70%
• So those 27 lead acquisition cost is $85.00 per lead!
So your real focus should be on a cost per acquisition cost of the lead, not the cost per click
Then the next question is how much does it cost you to acquire a customer. Once you fully understand this you can then calculate what you can afford to pay per lead and that is affordable relative to your profit margins?
Our job is to not only assist you in understanding this ad the bottom line is once our clients know the real cost per lead they can work out what they can afford to pay per lead. There is now no need to worry about the cost per click or the conversation rates or the traffic numbers. As long as you are getting a steady stream of new leads that you know the exact cost.
So with that said the cost per lead model is a system you should embrace. It takes all the guesswork out of the mysterious WWW and once you have those leads converting, the cost per lead model will allow you to grow your business now that you understand the real cost of the lead and conversation of that lead to a sale.
Adwords is relatively simple to use and it exists for one reason:
To generate fast, profitable leads for your business
But the real cost per click needs to be measured to include the cost the campaign manager is charging to run the PPC campaign for you then there is the hardware and systems you need to not only capture the lead but also measure the leads captured.
Yes, we do use Adwords but it is a small component of our campaigns. The systems and platforms we prefer are more complicated systems to operate and or they require a significant upfront investment by our company to generate better quality and far cheaper leads for your business.
The Cost per lead model we operate is industry-specific. The reason for this is the cost to generate leads varies greatly on a number of factors. One of which is the price for the end product, then there is the general PPC cost and the volume of traffic and searches available and how hard or easy it is to generate the leads.