Dealing with terminology in marketing
Lead vs bead vs deal
What is a lead?
A lead is a user who was led to your website, social media page or company by an advertisement and performed a certain action: made an appointment, filled in a callback form, placed an order. A lead appears when the client leaves his contact information.
Leads can be targeted and non-targeted. One of these two statuses is assigned in the CRM system: when processing a lead, a manager marks whether it was the target or not.
By analyzing the distribution of statuses and working with end-to-end analytics, the marketer can make an advertising campaign more effective and attract more leads.
Is there a difference between a lead, a bid and a deal?
Let's face it: it's a fine line. Where it goes depends on how long the buying cycle is and how many steps the customer goes through before completing the transaction.
Sometimes a lead, a bid and a transaction are the same thing. For example, your car breaks down and you need a tow truck. You start googling, call one of the first companies shown, and immediately arrange for a car to be delivered as soon as possible. Your contact information is received (the phone number is determined on the company side), the request is processed immediately, and the conditional "deal" quickly goes to work. Half an hour later, the tow truck picks up the car, takes it to the specified address, you pay - the transaction is completed successfully for both parties.
In another case, a lead is just an application, but the transaction is a bit different. For example, you need to order company calendars for the new year. You are looking for a printing company, go to the website of one of the companies, study the services, examples of work and prices. You are satisfied with everything, and you leave your contacts through the form on the website. You specify in a comment that you want to order 100 calendars - the lead and the application are ready.
A manager contacts you, clarifies the details, and then proceeds to draw up the terms of reference and documents. Here begins the transaction, which will have several stages: the agreement of the contract and assignment, advance payment, start of work, shipping finished products, post-payment.
In the third case, the lead, the bid and the deal are 3 different concepts. Take the real estate field. You want to buy an apartment, you go to a search engine and come across a good offer, and then you go to the site of the apartment complex. You are satisfied with the location, the price level, and you are ready to consider buying seriously - leaving your contact information.
Then the manager gets in touch with you and the standard stages of apartment selection begin: viewing, acquaintance with the conditions of purchase, choosing the floor plan, etc. Then the application is completed for a certain apartment in a certain house. But it is not a deal yet: let's say you need to get a mortgage. After the paperwork with the bank, you will again apply to the developer, and then the deal is done.
How does end-to-end analytics help?
When working with basic metrics you can track only the number of visits to the site, the quality of traffic, the number of leads and their sources.
The next level in working with analytics is setting up e-commerce for online stores. This tool gives information on sales, returns, profits, and popular products.
Finally, end-to-end analytics traces the path of each lead into a transaction all the way to completion. There are more than 40 metrics to assess performance: quality of request, cost per customer, deal amount, current deal status, etc. This allows you to work deeper with the data and optimize your advertising campaign, taking into account all stages of sales.
CPC vs CPM
What is CPC?
Cost per click is the price per click in targeted or contextual advertising, which means you pay for each click from your ad to the landing page.
What is CPM?
Cost per mille is the price of 1000 impressions, which means you pay for 1000 impressions of your ad.
What's the difference and when to use what?
CPC is suitable for a product or service with generated demand. CPM is better for outreach campaigns: when you want to tell about a new product, a new service or to improve the brand memorability, to work on the image and brand recognition.
ROI vs ROMI
What is ROI?
Return of Investment (ROI) is a measure of return on investment. According to the standard ROI calculation, it takes into account all the investments in the business that were made to make a profit: advertising budgets, the cost of the product/service, the cost of maintaining the sales department, etc.
One of the formulas for the calculation is:
ROI = (income - costs) / costs × 100%.
If the figure is below 100% - investment is unprofitable, if higher so it is profitable.
What is ROMI?
Return of Marketing Investment (ROMI) is another indicator of return on investment. When calculating, only advertising and marketing costs should be taken into account. You can calculate the index by a similar formula:
ROMI = (revenue - marketing costs) / marketing costs x 100%
A result above 100% indicates the success of the advertising campaign.
How it differs
The reality is that nowadays internet marketers use the concept of ROI, but count only the advertising and marketing costs. In other words, not everyone thinks about the differences in these concepts. Unfortunately, the level of work with analytics does not allow to correctly calculate the total ROI and marketing ROMI separately.
When calculating the index it is difficult to achieve high accuracy of the result, because there is a very important link in the sales chain - the sales department, and its activity is still difficult to track in numbers.
The introduction of end-to-end analytics, call-tracking and CRM allows you to track every dollar invested and control all stages of the sales funnel.