Bob Tripathi shares his opinions, insights and advice on all things digital marketing. In this video, Bob discusses the formula for forecasting leads to determine your marketing spend for the upcoming months and which marketing tactics to allocate for your ROI.
Debbie: Hi this is Deborah Warner with Bob Tripathi. We help companies strategize their forecasting–especially when it comes to generating their leads for the coming year. Bob, how can you accurately forecast the number of leads so you’re on target, not only for an annual basis but also for a monthly basis?
Bob: Essentially when you do a lead target, as a marketing department you need to generate x amount of leads over a period of time. Now you take that number because that’s the number that your department of marketing has been given. But now how do you take that number and then allocated it to all of those different tactics. One of the best ways I’ve seen is to look at all the marketing tactics that you’re going to be doing or that you would like to do for the year.
So you put it on a simple Excel sheet, for example. Take what the goal is so let’s say marketing. It’s supposed to drive 10,000 leads for the year. 10,000 leads per year comes to around 900 leads a month. Now in order to generate nine hundred leads, let’s say you’re doing the top four tactics which is your search, your organic search, your content marketing, your paid search, your paid media– all those kinds of tactics. Break it down on an Excel sheet and start from the very top.
Determine how much traffic you need to generate right on your site, because that’s where it’s going to start. How many leads are you going to generate? So what is the conversion rate out of those leads? How much budget are you going to allocate for each tactic. And how many marketing qualified leads (MQLs) will you generate? Out of that, what are the expected Sales Qualified Leads (SQLs)? Then you take each of the tactics and you break it down individually. That’s how each of the departments will get their goals for the year and the amount of traffic they need to drive, and the number of leads they’re going to drive.
Sometimes what happens is, for example with content marketing, you can drive 3 million visits, but your conversion rate could be just 2 percent, which is very low. On the other hand, the inbound leads like SEO might have lower traffic. But could have higher conversions so then those are good leads. So your conversion rate matters a lot. And sometimes when you do monthly lead forecasting for each tactic, what happens is you can also look at the conversion rate.
Therefore, sometimes you’re driving a good amount of traffic, but your landing page or your app or whatever is not up to par. Then you can look at conversions and then you can improve the conversion rate. Automatically when you do that suddenly your lead forecast changes. And now this tactic, whatever the tactic is, is going to end up generating a lot more leads. Basically that takes the pressure off from the other tactics. But again, it’s all about putting it down right from the top level like how much traffic you need, what is the conversion rate you need, how much budget you’ve been allocated, what is the cost of the lead for each of the tactic, so on and so forth.
You try to do your best to get the forecasting right to the T, but usually it doesn’t happen. But you have to try your best to measure it and try again. That’s what marketing is about!
Debbie: Awesome. Well thank you so much. Good luck with your lead forecasting. And if you need to contact us we’re at digitalsparxmarketing.com. Thank you.