Why do people like to specialize in eCommerce? It’s easier to prove strategies are working and that you are adding value to the client’s business. You can quickly calculate the added profit you are bringing to their company, not to mention forecast future sales.
For lead generation, it is not as simple to show value to the client. As this seems to be a pretty common scenario for agencies working with lead generation clients, I’ve laid out a success story that incorporates The 5 Stages of Dealing with a Lead Gen Client.
PART 1 - The Need
Years ago I had a client that specialized in real estate and finding apartments for people moving to a new city, so their business was lead generation. Working at an agency that specializes in eCommerce I was somewhat new to lead generation accounts, and to be honest, new to agency life in general.
To kick off this engagement I set up a call to introduce myself, learn about their business, and establish goals that they had in mind for their Google advertising campaigns. Like most lead generation businesses I have worked with over the years they gave me a number of leads per month, for the sake of easy numbers we will say 50, and a CPA (Cost-Per-Acquisition or lead) target which was somewhere between $30-$45 per lead.
I took the information from the call about their typical customers, their unique value proposition, and their goals to then set up the account with four different campaigns. The strategy behind setting these separate campaigns up was to target users in four different ways. In an effort to drive the 50 leads I wanted to test which campaign strategy would be the most fruitful when getting in front of the highest performing people.
Within a month, it was pretty obvious that one campaign was doing the best in terms of driving leads below the CPA target, and that campaign happened to be limited by budget. So what did I do? I lower budgets in other campaigns in order to push spend towards the top performing campaign. At that point, the highest performing campaign was able to scale and we were generating way over the 50 leads with a $15 CPA. Everything was going great! I sent the monthly report with all of the great numbers and set up our monthly call to go over everything.
PART 2 - The Heartbreak
Many of you can probably guess what happened on that call.
I got on the call, excited to show them how well the account was doing, and was quickly hit with a, “We need to revert everything back. If we have a couple more months like that we will go out of business”.
At that moment, I felt so confused. In my mind, myself and the client had agreed on goals and I had blown those goals out of the water. Despite my excitement regarding the increase in performance, the client was upset, demanding change, and threatening to leave. This was a first in my relatively new foray into the agency world. Sure I had rough calls with clients before, but never had I experienced a call where I was so caught off guard after thinking everything was going so well, and in fact things were in a dire spot.
PART 3 - The Realization
It turned out that even though we were crushing it on the lead quantity front, the lead quality was abysmal. This was the first time I had realized that CPA and lead quantity goals weren’t enough, unless the client is getting paid for each lead. We needed to find a way, in the lead generation world, to put a value on those leads because not all leads are created equal.
Instead of going back to the account to reset and start over, I realized the biggest need in the moment was to fix the client's goals first, otherwise we could be in the same exact position in the following month. We needed a way to tell if the generated leads were quality, and in fact leading to actual clients for the business.
PART 4 - #GOALS
I scheduled a follow-up goals discussion with the client, and luckily we went really into depth on how we can make adjustments in real time to drive more clients for them. We discussed the following:
What kind of leads we had been driving vs what makes a “good client fit” for them
The different types of leads on the site - we had been counting all form fills and phone calls as the same type of goal
How much time they could devote to lead scoring
At the end of that discussion, we concluded with an idea to push really hard on lead scoring for a month or so to see if the scoring would tell us if one type of lead had a better Conversion Rate than others, and which campaigns/ad groups/keywords were pushing the best quality leads. We came up with a “good” (2), “ok” (1), “bad” (0) system because it was simple and they didn’t have a ton of time to do this. The goal here was 50 points, given the scoring system we had decided on.
PART 5 - The Conclusion
At the end of month two, performance had really improved. We had created, by using zaps and spreadsheets, a fairly automated system - leads would be dumped from their CRM system into a spreadsheet if they contained a GCLID, signifying a lead from Google Ads. Then, once they scored the lead, it would be automatically imported back into Google Ads so that we could see which campaigns were driving each type of lead. It turns out the campaign where I had pushed the spend to last month was, not surprisingly, the culprit of a majority of the 0-point leads. A campaign that I had really pulled back on because it had a high CPA, over $60, was producing the most 2-point leads.
The largest revelation from this situation was how important it is to effectively communicate goals with the client, and in this scenario it was creating a collaborative lead scoring system. With this system, we were able to make quick effective adjustments to produce higher quality leads. In fact, the system worked so well that we kept doing it that way for years and the client found it worthwhile to spend that extra time each week scoring the leads which allowed us to make adjustments to keep hitting that 50-point mark.
This is just one way to handle lead generation accounts with lead scoring but the point of this long winded anecdote was to illustrate the point that the goals you are setting for your lead generation account have to make sense to your business, and many times that means a minimum quantity or CPA goal won’t cut it.