Value based pricing is the new buzz term in online lead generation, but what does it take to sort your Rolls Royces from your Robin Reliants?
The infamous quote “Half my advertising is wasted, I just don't know which half” may be a century old but it still applies today in the digital age.
However, in the world of online lead generation (OLG) where every lead can be tracked from creative used to generate the lead through to an end conversion not only can you determine which half is wasted, you can also measure the true value of the half that works.
Although many advertisers are attracted to lead generation because of the potential to measure every part of the process, the mistake they often make is to rely on gut feeling and instinct when planning their lead generation campaigns.
The focus is too often on how clever the creative looks or how pretty the landing page is when these are just variables to be optimised to maximise return on investment (ROI) from the campaign.
Of course, creatives and landing pages are important, but they are only important in the context of the objectives of the campaign, which is to generate a required supply of quality leads not to garner an entry into an online marketing creativity awards.
Online lead generation is a science and no matter how experienced an advertiser is, it is not possible to just look at a set of creatives and landing pages and make a judgement on likely lead performance or lead volume.
What’s needed is data, and lots of it, that can be tracked back through the sales funnel to determine which creatives and landing pages work best and then arrive at an appropriate lead price for the particular supplier or channel.
This is the value based pricing model and while this is the holy grail for lead buyers, to achieve this in practice requires a sophisticated technology platform, as there are thousands of variables at work that can influence the campaign performance and need to be tracked appropriately.
For example, just one supplier might use a variety of different types of marketing to generate leads and each method might involve thousands of creatives or keywords that might direct the consumer to multiple landing pages with different messages and calls-to-action.
Scale this up to a large campaign with multiple suppliers and the advertiser might need to manage, monitor and measure potentially thousands of leads across hundreds of sources every day.
A lead generation platform allows advertisers to measure lead performance between suppliers and channels and get a genuine like-for-like comparison which enables them to determine the correct CPL.
Only then can advertisers move from the old model of paying an average price for a blend of leads from a variety of sources to a value based pricing model only purchasing leads from sources that work and making sure the CPL is a function of lead performance.
A lead generation platform can also offer advertisers that are working with multiple suppliers additional benefits, such as the ability to deduplicate leads in real-time.
This means that, no matter how many forms a consumer fills in across suppliers, the advertiser will only pay once for the lead. For campaigns with high CPLs such as for financial services products, this alone can save tens of thousands of pounds.
Lead generation is an extremely powerful form of direct response marketing but success is often determined by the technology wrapped around the process.
The level of transparency, tracking and reporting offered by lead platforms allow advertisers to be far more efficient by enabling them to determine down to a granular level how their far their lead spend is going.
The next challenge is to try to source more leads from the best performing suppliers.