Most businesses want to generate more leads from their website.
Considering your website likely generates over 10x more visitors than your office space (and likely >4x more than your retail stores) this commitment has merit and can pay off big when understood better.
Before you can generate more leads, it’s important to understand more about leads.
Here are the 2 main types of leads to understand:
Let’s talk about each one separately.
These are visitors who reach out to your company via the phone number listed on your website or an online form. They have a high rate of closing.
Your hot lead conversion rate is the percentage of unique visitors to your website (or a particular page) that translate into hot leads.
At tbk Creative, we pay a lot of attention to lead conversion rates. We see websites from various industries that are all across the board, range from 0.2% (usually poor) to 3.0% (good).
Here is why paying attention to your hot lead conversion rate matters: It starts you down the path of measuring the value (and ROI) that your website is generating your business.
Here’s how you can begin to build out an ROI measurement model on your website:
Hypothetically, let’s say you’re a Marketing Director at a medium-sized accounting firm.
- 1. First, you want to determine the average lifetime or 1-year value of a customer. For our example, we’ll go by the 1-year value to be conservative although most professional services companies will keep new clients for many years. Let’s say for the accounting firm, this number is $4,000 per new client on average in first year gross revenue (knowing some are higher and some are lower in billings).
- 2. You want to learn your close rate. Your close rate is the percentage of hot leads that become a sale. A good, fast way to determine this is go back to your last 10 leads that come in and look at the number that are now paying clients. That will give you a fair estimate of your close rate. For our accounting firm example, let’s say the close rate is 60%.
- 3. Next go back through your records and determine the number of hot leads your website generated your business (legitimate web forms + unique phone calls generated from the web) in that same period.
To figure out unique phone calls, you can either:
- A. Install a web-only phone number or a more intuitive phone analytics software (ie. Ifbyphone) on your website; or..
- B. Train your sales or customer service team to always ask how the prospect found out about the company.
For our example, let’s say you received 5 web forms and 9 unique phone calls.
- 4. Finally, you will divide your hot leads (14 from #3) into your unique visits and that will provide your total hot lead conversion rate.
Let’s suppose your accounting firm website received 2,205 unique visits last month.
In our example, our client would go 14 / 2,205 = 0.6%.
Understanding ROI: Now that you went through steps 1-4 above, you’ll know what your website is generating you (at a bare minimum) each month and year, and even more importantly, you can now calculate how with each website change it will incrementally increase your sales.
An Important Example:
To explain, using our accounting firm example above, if they rebuild their website or make incremental changes to the existing one which increases their hot lead conversion rate to only 0.8% (33% increase in overall hot leads), this accounting firm would net a minimum of $124,800 in additional new annual revenues as a result of those web changes.
This is without changing their website traffic.
Take a look at this chart that breaks it down more clearly:
You can see how by knowing your hot lead conversion rate and working on increasing it over time can add economic value to your business.
Here’s the quick-reference formula for calculating how much your website is generating your business.
Now let’s talk about soft leads.
These are the visitors who provide their information through other means on your website (I’ll explain how below). They are within your target audience, but aren’t ready to buy yet.
As mentioned above, most websites convert hot leads anywhere from typically 0.2-3%. At best, this means at least 97% of people coming to your website aren’t buying your product or service right now.
The reason is most people who may be in your target audience on your website, may simply be in research mode and not ready to buy a product or service right now.
However, you can create your website to begin capturing a portion of that 97% of people you’re currently losing.
You can do so through some of the following methods (note – these methods work better for different types of businesses):
Webinar Registration – Your company can launch an educational webinar series where your team offers webinars at no charge to your current website visitors and others. Using software like Gotowebinar or WebEx, as people register, your company will acquire their information as leads.
Here’s a few samples of webinars tbk Creative has facilitated for itself and clients:
E-Book Downloads – Your company can create educational e-guides and make them available to your website visitors and others for download. In exchange for doing so, you can capture their contact information.
Here are a few samples of e-books tbk Creative has facilitated for itself and clients:
E-Newsletter subscription – You can start an email marketing program and allow website visitors to register for the list.
Online Campaigns – You can run online marketing campaigns like a sweepstakes or other promotions that generate new leads.
Turning Soft Leads into Profit
As you acquire soft leads, you can do one or both of these things with them:
- A) Insert them into your sales CRM and follow-up
- B) Add them on your email marketing program.
The thing about soft leads is that as they are coming in, these may be consumers or businesses that aren’t immediately looking to buy your product (although some will), but that most will buy your type of product some day.
The “some day” part is key.
Your website probably has potential customers coming to it right now who are only in research mode. As these people leave the site, if you haven’t found a way to capture their information and stay in touch, then when they are ready to buy your type of product in 3 months, 12 months, whenever, you may not be the supplier who’s top of mind anymore. Metaphorically speaking (or literally), somebody else’s magnet may be on their fridge.
A great soft lead program on a website can boost your overall website leads to 5-10%.
Here’s a calculation to show the revenue potential of this train of thought.
Imagine that through phone follow-up and/or a good email marketing program you close 5% of all your soft leads. This seems reasonable since your hot lead close rate will be much higher (we used 60% in our example above).
Using our accounting firm example, lets say that through a good soft lead program, their website converts only 3% of all its traffic as soft leads and closes only 5% of that traffic (through a strong email marketing program).
This accounting firm would earn an additional $144,000 per year in gross revenue.
Shocked? Let’s look at the math closer:
Soft leads work if you build out and maintain a strong content marketing strategy using some of the ideas above.
Appendix & Other
Although not technically leads (by the above standard), there are two other types of website visitors worth mentioning as an appendix to this article:
Visitor of Interest – These are people who exceed a normal level of interest in their navigational habits on your website. For example, if you own a window and door retail dealership, these could be visitors that click on your “Get a Free Quote” page or “Contact Us” page but don’t fill out a form or call. The value of these visitors can be tough to evaluate but there is some worth there. A window dealer may have their showroom addresses listed on their ‘Contact Us’ or ‘Our Locations’ pages. Knowing the number of people who access these pages for this window dealer may allude to the value of their website or the performance of certain digital marketing campaigns.
Online transactions – This group purchases a product on your website. This is reserved for e-commerce websites. They aren’t technically a lead because they are a sale and much of the same psychology above doesn’t apply. To an e-commerce website though, hot and soft leads become a little less important (but could still be part of their content strategy) and e-commerce sales become gold.
Most websites we look at have untapped thousands of dollars in revenues the business is missing out on.
By reading this article, you should understand better the different types of leads that your website can generate and some simple tips to begin claiming them.