Marketing Communications ROI Analysis: Calculating the Total Cost Per Qualified Lead

February 22, 2010

The use of online marketing and social media channels such as blogs, LinkedIn and Twitter are becoming key tools in generating new leads according to a new survey.

With marketing staff and budgets tighter than ever become, it is time to think about new strategies for connecting the dots and marketing more efficiently. Lead generation via search marketing, social media, content marketing and PR should be considered under one integrated marketing plan to maximize effectiveness and business value. Traditional, outbound marketing is largely broken and news to be considered in the context of overall cost per lead.

The use of online marketing and social media channels such as blogs, LinkedIn, Twitter, Facebook and YouTube are becoming key tools in generating new leads according to a new survey.

A recent survey, 2010 State of Inbound Marketing, by HubSpot revealed some staggering results and the growth of inbound (online) marketing.

Average cost per lead for outbound (traditional) marketing was $332. Outbound marketing includes trade shows, direct mailers, cold calls, etc.
Average cost per lead for inbound marketing (social media sites, blogs, SEO, etc.) was $134. - 60% less
Social media sites and blogs are the most cost-effective ways to generate leads out of all marketing activities (trade shows, mailers, telemarketing, etc.
63% of respondents estimated that these tools were ”below average cost” for lead generation.
88% of those surveyed are either maintaining or increasing their inbound marketing budgets in 2010.
61% of respondents reported that they publish a company blog compared to 48% a year ago.
85% of respondents rated company blogs as useful or better in 2010.

The survey by HubSpot not only reveals that companies are using online marketing tools but they are seeing results (i.e. lower average cost per lead). In the apparel and fashion industry, the use of online marketing tools
(social media sites, blogs, SEO, etc.) is growing but traditional forms of marketing still dominate the landscape in our industry. Unfortunately, traditional marketing techniques – including direct mail, print advertising and trade shows – are becoming less effective. Buyers are not only finding ways to tune these messages out (do-not-call lists, TIVO, email spam filter, etc.), but more importantly they now have the capability to evaluate the products and services they need on their own.

As more data such as the HubSpot survey becomes public knowledge, we expect online marketing to become a key element in marketing campaigns. There are some companies that are expanding their marketing efforts to include social media tools. The opportunity is there for companies in our industry to leap-frog their competition using online marketing tools (social media sites, SEO, ebooks, white papers, etc). The question is – who will make the commitment to online marketing and establish themself as a clear leader in our industry?