Posted to Erik Wagner's blog on November 5th, 2012

The Lead Forecasting Secret Equation is...

All marketing should be data-driven. While there is an inherent element of risk when you make a marketing investment, innovative marketers identify and analyze trends in the metrics and then make informed decisions. By showing you a new way of analyzing your data, this post will help you improve the lead generation techniques and therefore number of leads generated by your Internet marketing campaigns.

The majority of our client base judges the success of their Internet marketing campaigns based on one metric: the total number of leads generated by the campaign. We track client conversions using several tools, but primarily through Google Analytics, Salesforce, and marketing automation tools. 

Tracking our clients’ success also requires Volacci to regularly review the keywords used to optimize a webpage to see if they are increasing in ranking, driving relevant traffic, and most importantly, generating leads for our clients. When determining which keywords to optimize a website for, I will select and rank keywords based on a large number of metrics. That said, I weigh the lead generation potential of a keyword very heavily as most of our clients’ base the success of their Internet marketing campaigns on the number of leads generated.

The following “equation” will provide you with a step-by-step process that can forecast the potential number of leads that a keyword can generate for your Adwords or SEO campaign. Before I start, let me preface by stating that this equation is only truly effective once you are tracking the correct data.

1. Identify Potential Keywords

There are a myriad of strategies to identify potential keywords for your website, but I would recommend that you start with your own data first. Open up your Google Analytics account and take a look at the keywords report to see the keywords that Google believes are most relevant to your website. Set the date range to the past 12 months so that you can get a more holistic perspective as to what keywords are driving the most traffic to your website.

At this point, click on the “advanced” button and filter out any keywords that are not performing well.

There are several metrics that help you filter out poor keywords. 

  • Bounce rate: This indicates how engaged people are with your content. A high bounce rate typically indicates that the keyword is not a good fit for your Internet marketing campaign, because the search result for that keyword is pointing to a landing page with content that is not relevant. Alternatively, it could indicate that your content is inadequate.
  • New Visits: A low percentage of new visits is also an indicator that the keyword is perhaps not the best choice for your efforts. To improve your brand awareness, it is essential to get your site in front of as many new sets of eyes as possible.
  • Conversion Rate: Finally, a low conversion rate for a single keyword means that this keyword is not going to impact your bottom-line. There are many possible reasons for a low conversion rate, perhaps the keyword is not used by people with the intent to buy, the landing page could be bad, or the content could be irrelevant to the searchers. Regardless, if you have better options, it’s best to avoid terms with low conversion rates.

2. Export the List

Now, you have a list of keywords that are producing high quality traffic to your website. You need to export this list of keywords so that it can be modified, but, first you must switch the view in the “Explorer” to the primary goal set.

Now you will be able to see the conversion rate for each keyword.

Then click on the export button to download the spreadsheet.

3. Find Out the Potential Number of Visits

Once you export this list, I recommend visiting the Adwords Keyword Tool and input the keywords within the page. Be sure to select “Exact Match” on the left hand side.

At this point, you’ll be presented with some search data; the most critical of which to consider is the Local Monthly Searches. 

Sidenote: There have been several studies that show that a site that ranks #1 for a particular keyword in the organic search results will attract approximately 50% of the monthly clicks. This number varies slightly based on the industry and the keyword, but it’s a good benchmark statistic. Looking at my clients’ data, we generally see closer to 55-60%, but I like to be on the conservative side. You can see a breakdown of click-through rates for different types of queries in this recent SEOMoz study (http://budurl.com/5jsv). The formula presented in this blog can be modified so that you can find out approximately how many leads you will generate for each of the top ten results.

4. Find Out The Conversion Rate

Now we have an approximate number of visits that your site could possibly get if it ranked #1 for a particular keyword. Next, we need to multiply that number by the actual conversion rate for each individual keyword. 

If you input the keywords into the Google Adwords Keyword tool in the same order that they were exported out of Google Analytics, then this is a simple copy and paste. Align all of the data, multiply it out. It should look something like this:

Keyword

Local Monthly Searches

Potential Visitors #1 Ranking

Conversion Rate

Potential Number of Leads

SEO

90,500

45,250

2.80%

1,267

Search Engine Optimization

33,100

16,550

3.20%

530

Drupal SEO

590

295

7.69%

23

If you do not have a conversion rate for a particular keyword, then I would suggest using the site average conversion rate to give you a better picture of the potential value that keyword would bring. Bare in mind, though, that the conversion rate for a particular keyword may fluctuate greatly from your site average.

Formula

This formula is an easy way to determine how valuable a keyword is to your business. Apply this formula and you can determine how many leads that a keyword could generate for your sales team.

(Local monthly searches) x (% of Potential Visitors for ranking) x (Conversion Rate %) = Potential Number of Leads

For the ambitious number cruncher, if you have the data available there are a few other ways to increase the value of this equation. You can multiply the potential number of leads by the average percentage of qualified leads. Then, you could apply an average close ratio to get a more accurate number of sales that your team can generate. Finally, if you know the average lifetime value of a client, you can multiply that data out. It should look something like this:

(Potential Number of Leads) x (% of Qualified Leads) x (Close Ratio) x (Average Lifetime Value of Client) = Total Revenue Generated by Keyword

Do you have any “secret formulas” that you use to help determine the value of a keyword? Any suggestions for improvement on this formula?