Thursday, 26 April 2012

Lead Generation Marketing: Time for ROI to kill off CPA

When you think about it, CPA is possibly the most punishing metric created for lead generation marketing. The raison d'etre of lead generation is the unique process of collecting someone's contact details, nurturing them with great content and so convert over time.

The offline direct marketing world has long favoured ROI for direct mail campaigns because of the time it takes to get back results and the associated costs that are tied up in the campaign.

Whereas in the whizz-bang world of online, some bright spark managed to make CPA the official yardstick of campaign success. This creates an atmosphere of instant gratification which lumbers a massive burden on lead generation to perform instantly or die. Ultimately instant performance is down to where the consumer actually is in the buying cycle and how engaged they are with your brand. Using CPA metrics only tends to steer you away from the long tail of lead generation where careful lead nurturing extracts ever more conversions out of the same batch of leads.

ROI based lead generation and performance marketing allows longer-term planning and more investment in smarter ways to convert customers. It has never been cheaper to automate effective marketing communications to potential customers to ever more gently coax them down the marketing funnel.

So the next time someone gives you the CPA of a lead generation campaign, try asking back what is the end ROI and see what happens... nothing well...

The more we start to adopt ROI as the key metric in the lead generation industry, the more companies will invest long term in the channel to create longer lasting benefits we all need more of.

6 comments:

Carolyn Sheppard said...

In the charity world ROI is a very important KPI. CPA is an ok figure to look at in the early days, but ROI is crucial.

Ali Khan said...

What i think of ROI , i see it as Revenue Share , why?
Because with an Revenue Share you always "at least" double your money.

So it all depends on a marketeer him self.

Cheers!

Peter Bell said...

Very true, I think the charity is one of those sectors that embrace the long term nature of member recruitment and using the associated skills that go with it.

Mason Wiley said...

Agreed -- but in my mind, CPA has always been just a pricing model and never a substitute for ROI. How can it be? Lead CPA does not at all address the quality of the lead acquired.

LeadPrime said...

Yes...gottch ur point thanks for sharing...

lead generation marketing said...

CPA is i think very punishing while ROI here is quite smarter. It allows longer-term planning and more investment to convert costumers.