Why a low cost per lead does not prove a good channel
Follow the journey between an ad click, a sale and a repeat visit.
Key takeaways
- Compare lead quality and payment conversion
- Include margin and equal customer observation periods
- Separate attribution from incremental effect
Look beyond the enquiry
A low-cost channel can bring people who are a poor fit for the product. Alongside cost per lead, I review fit, sales response, payment and refunds. Event definitions must match across advertising, analytics and CRM.
Questions along the journey
Source
Which audience and offer brought the person?
Enquiry
Is there a fit, and did they receive a reply?
Purchase
What influenced the choice, and how much margin remained?
Return
Did the customer receive value and come back?
Compare like with like
People acquired yesterday have had less opportunity to purchase again than last month’s customers. Retention comparisons need equal time since acquisition.
What changed the outcome
An attributed sale helps describe the journey. Estimating additional sales from an action requires an appropriate comparison, such as a control group. Without it, I record other changes and describe an observed relationship rather than a proven effect.
Bring to a channel review
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