In the world of digital marketing, the focus often shifts towards acquiring leads at the lowest possible cost. However, this approach can be misleading. The quality of leads is far more crucial than simply how much you spend to acquire them. In this post, we will explore why spending less on leads can sometimes be counterproductive and how prioritising lead quality can lead to better sales outcomes.
Many marketers boast about their ability to secure leads for as little as two dollars. But how qualified are these leads? If a lead only provides their name, email, and phone number—often auto-filled by Facebook—the likelihood of conversion is minimal. It's essential to understand that a low cost per lead (CPL) does not equate to high-quality leads.
Instead of celebrating low CPL, we should focus on the cost per sale. This metric gives a clearer picture of how effective our advertising efforts are. If your leads are not converting into sales, then the money saved on lead acquisition is meaningless.
Let’s look at a case study involving a dealership client. The client ran two different ad sets. The first ad set did not disqualify any leads and had a CPL of around fifteen dollars. The second ad set, however, disqualified leads based on credit score and had a slightly higher CPL. Surprisingly, the second ad set generated more sales.
This example illustrates that while the first ad set appears more economical, it is the second ad set that ultimately provides a better return on investment. By asking qualifying questions such as how soon the lead intends to buy, their employment status, and their budget, we can filter out unqualified leads effectively.
To ensure that your leads are genuinely interested in your offerings, consider asking targeted questions that can help gauge their intent:
By implementing these questions into your lead generation forms, you can significantly improve the quality of your leads.
Utilising Facebook's Business Ads Manager, you can create lead forms that incorporate conditional logic. This feature allows you to ask qualifying questions and disqualify leads that do not meet your criteria. For example, if a lead does not meet a certain credit score, they will not be submitted as a lead, saving you time and resources.
Here’s a simple process to set this up:
Initially, you may notice that the cost per lead increases when you start disqualifying leads. However, over time, this approach stabilises and typically results in a lower cost per sale. By investing in higher-quality leads, you save money on ad spend while also increasing your chances of conversion.
Ultimately, the goal should be to secure appointments, conversions, and sales—not just leads. Remember, leads are merely potential customers; what you want are actual sales that contribute to your bottom line.
In conclusion, while it might be tempting to celebrate low-cost leads, the focus should always be on lead quality. By implementing strategies to qualify leads effectively, you can improve your conversion rates and lower your overall cost per sale.
If you’re looking to dive deeper into Facebook advertising strategies and learn how to implement these techniques, consider joining our Facebook group. You’ll find a community of like-minded business owners ready to share insights and strategies.
Cost per lead refers to the amount spent to acquire a lead, while cost per sale measures the expense involved in converting that lead into a paying customer. Focusing on cost per sale provides a more accurate reflection of your advertising effectiveness.
Improving lead quality can be achieved by asking targeted qualifying questions, using conditional logic in lead forms, and actively disqualifying leads that do not meet your criteria.
High-quality leads are more likely to convert into paying customers, which ultimately increases your return on investment and reduces wasted ad spend.
It’s essential to track metrics such as cost per sale, conversion rate, lead quality, and overall return on ad spend to evaluate the effectiveness of your campaigns.
While you may see an initial increase in cost per lead, you should begin to see improvements in your cost per sale within a few weeks as you refine your lead qualification process.
By adopting a quality-focused approach to lead generation, you can enhance your advertising strategy and drive better results for your business.
