In the world of lead generation, demand generation, sales development, and sales, everything hinges on one crucial element: leads. In this blog post, we will delve into the often overlooked power of phone-based lead generation and explore industry benchmarks to understand its cost-effectiveness. While many businesses prioritize advertising, social media, and email campaigns, we will demonstrate why utilizing the phone correctly may be the untapped solution you’ve been searching for.
Defining a Lead
To comprehend the cost per lead (CPL) and its significance, let’s start with a clear definition. A lead is a direct connection made with the intention of purchasing a product or service, established through email, phone calls, or in-person interactions. The CPL is the total marketing expenditure divided by the number of new leads acquired. This cost is incurred regardless of the eventual outcome, emphasizing the subjective nature of lead definition and completion.
Average Cost per Lead by Industry
Examining industry-specific benchmarks can provide valuable insights into lead generation costs. Let’s explore some examples:
Financial Services:
- Paid leads: $761
- Organic leads: $555
Legal Services:
- Paid leads: $781
- Organic leads: $560
Staffing and Recruiting:
- Paid leads: $400
- Organic leads: $400
Solar:
- Paid leads: $200
Real Estate:
- Paid leads: $400
- Organic leads: $400
IT Managed Services:
- Paid leads: $600
- Organic leads: $300
Software Development:
- Paid leads: $500-$1,000
The Power of Efficient Phone-Based Lead Generation
Now, let’s shift our focus to the true potential of phone-based lead generation when executed efficiently. By utilizing modern data to target specific companies and individuals, businesses can significantly reduce their CPL while simultaneously boosting the success of their sales efforts and overall market performance.
The Cost of Phone-Based Lead Generation
Considering the labor cost of a sales development representative (SDR) responsible for phone-based lead generation, let’s examine the breakdown:
- SDR base salary: $40,000-$33,000
- Assuming an SDR makes 80 dials per day, the cost per dial is approximately $2.
Cost per Conversation and Meeting
Depending on the dial-to-connect rate, we can analyze the cost per conversation and meeting:
- Assuming an 8% conversion rate from dials to conversations, it takes approximately 13 dials to initiate a conversation, resulting in a cost of $26.
- With a 12% conversion rate from conversations to meetings, it takes around 104 dials to schedule a meeting, costing approximately $212.
When we compare phone-based lead generation to other channels, even without optimizing the dial-to-connect rate, the phone outperforms many alternatives in terms of cost-effectiveness.
By incorporating phone release strategies, businesses can effortlessly achieve a 20% to 30% conversion rate from conversations to meetings, significantly driving down the cost per lead to the range of $50 to $87.
Unlocking the Potential of Phone-Based Lead Generation
Contrary to popular belief, the phone is a highly efficient lead generation channel. When we analyze the data and compare lead generation costs across industries in 2023, utilizing the phone correctly offers a remarkable decrease in the total cost per lead.
In the ever-evolving landscape of lead generation, it is crucial to explore unconventional yet highly effective strategies. By leveraging the power of phone-based lead generation, businesses can tap into a cost-effective and targeted channel that often goes unnoticed. Interested to learn more about how you can get started with effective phone strategies and contact prospects who need your solution and who will actually answer the phone? Get started here with a conversation with us today.
