21 Mar The right lead channels can make all the difference
B2C brands (specifically insurance and banking) are the largest lead generators both in volume and spend in South Africa. So says Gareth Mountain, founder and CEO of Mountain Direct Solutions, experts in direct marketing strategy and solutions.
The right lead channels can make all the difference. Put simply, lead generation means driving large volumes of prospective new consumers into an online sales process OR into call centres where agents complete the sale over the phone.
The banks and insurers will either do this lead generation themselves or partner with specialised marketing companies to help them. There are many marketing channels that can be used to drive consumers into this sales process; the most popular being above-the-line (TV, print, radio) as well as below-the-line digital channels like SMS, web traffic and email. Lead generation can be further categorised into high affinity or low affinity leads. i.e. if the consumer knows and trusts the brand or if they do not.
What is important for all marketing and sales teams to understand is that each of these channels has a different conversion rate (for example, converting a lead into a sale); thereby affecting both the cost of the call centre to sell, as well as the cost to market to the prospective consumer. This is called the cost per acquisition and is arguably the most important metric to set.
If conversion rates are high the sales cost goes down and the more there is to spend on marketing. If the sales cost is high due to a poorer quality of lead, then the less there is to spend on marketing. Understanding the channel quality and its conversion rates is therefore a key concept in lead generation. Below are some examples of how different marketing channels affect the conversion rate.
This channel has the highest brand affinity and generally drives the best conversion rates of up to 50%. It is however very expensive from a marketing point of view and the cost to acquire a new client can be very high. It is a channel that can target all Living Standards Measures (LSM) and generate large volumes of leads. Now that ATL marketing is more measurable by using calls to action, it’s often used to drive consumers to visit their websites or respond to SMS shortcodes.
Websites that have good Search Engine Optimisation (SEO) structure, good fresh content and a good sales funnel (user experience) to create a lead or online sale can have excellent conversion rates of up to 50%. However, large volumes of leads can be tricky as driving traffic to your website via Paid Search marketing is expensive and very competitive. Web traffic usually targets a mid to higher LSM due to access to the internet.
Email is a very common and low cost channel that is used to drive traffic to specific landing pages where consumers complete a lead or sale. Opt-in email data with a high affinity that is presented with an email that has relevant content brings in very high quality consumers and can yield conversion rates of up to 30%. With no affinity, email leads convert well below 20%. Email generally targets mid to higher LSM consumers.
There are huge lead volume opportunities in SMS marketing, but conversion rates can take a while to get to the same levels of ABL, web or email. Conversions can be anywhere from 5% to 30%, which, when low, drive up the sales cost (but the marketing costs are generally very cheap and easy to predict with time). However with SMS you can spend enormous amounts of money to generate leads, so ensure you have clever Marketing Automation Software to manage this channel in real time. SMS is used to target all LSMs but works best in mass market; low to mid LSM.
Once you can easily predict lead volumes and the conversion rates in each marketing channel, your business can then rapidly scale your marketing and sales activities to build a larger client acquisition capability; as long as you keep your CPA metrics in-line with what the business has set.
Finally, although I’ve focused here on marketing channels, as important is the role of the call centre in the client acquisition process. Not only do they need to know how to sell to leads from these channels, but the agent quality, technology, leadership and training requires ongoing focus.
By Gareth Mountain, originally published on www.mediaupdate.co.za/marketing/84400/the-right-lead-channels-can-make-all-the-difference