Saturday, January 08, 2005
Useful Metrics: How Hot is that Lead? (Part II)
In my previous post I mentioned a Lead Interest Index as one useful metric. Here is the methodology I use for calculating a LIX for each new lead: Wanting to keep things simple, I composed the Lead Interest Index of three factors: The Opportunity Launch Date (OLD), the Call-to-Action Date (CTA) and a Contact Channel Adjustment (CCA).
The OLD is the estimated time, as supplied by the prospect, when the they believe they will have a need to launch an opportunity (ie: have a sales team in the field, start a research project, launch a new product, etc.).
The Call-to-Action Date is how soon the prospect has requested some return action on our part (ie: send information, set up a meeting, return an RFP, etc.). Initially this would be from the date of the original inquiry, but would later adjust to the date from the most recent contact as further lead development actions take place.
The Contact Channel Adjustment is a bonus score I apply depending on which inbound channel the prospect used to reach us. You can create CCAs that are appropriate to your business, but in our case, we ascribe a lower bonus score to someone who has called or emailed based on a campaign we did versus someone who visited the web site and completed a Request For Information (RFI) form on the site. The reason for this is that with most of our marketing campaigns we drive prospects to landing pages or microsites with more indepth information and value-added interaction to further qualify their interest. If they have already taken the extra step of visiting a landing page based on a campaign, they have a more informed view of our services prior to contact. At my company we place the highest CCA value on prospects that tell us they came to us based on a referral. By their nature, referrals from a trusted source represent a highly qualified lead channel, since the prospect is already positively disposed towards us and has an interest (cultivating these “brand evangelists” who refer others to our company should be key to a lead generation/cultivation strategy in corporate marketing, but that could be the topic of a whole other series of posts!).
The formula for calculating the Lead Interest Index is as follows:
Table 1 below describes how the values for each factor are obtained.
You may choose to use the Lead Interest Index metric to look at a lead for the date it enters the lead generation pipeline, the percent change month-to-month or a variety of other ways, depending on the needs of your business. And of course, the time frames and inbound channels you use need to be aligned to the specific sales cycle of your business.
In the next post in this series I’ll describe a real use example of calculating the Lead Interest Index to follow a lead over time.