6 Essential Metrics for Measuring Outbound Lead Generation

Most companies use a combination of inbound and outbound lead generation. As far as processes go, the similarities between inbound and outbound pretty much end at the title; inbound lead generation is gradual, organic, and ongoing, while outbound lead generation is expedient, targeted, and finite. Both have their own strengths and challenges.

Though these two entities are very different, they are often treated very similarly from a measurement standpoint. Leads coming from outbound campaigns are distinctly different than leads coming from inbound campaigns. Outbound leads are targeted and generally paid for on a per lead basis, whereas the costs for inbound leads come from the initial setup. Metrics for measuring outbound leads need to take into account both targeting and costs in a way that inbound metrics do not.

The following are our six essential metrics for measuring the effectiveness of outbound lead generation.



1. Return Rate

What it means: Return rate is the percentage of leads that are sent back to be replaced. Leads can be returned for a variety of reasons, but the most common issues are records that fall outside targeting and invalid information (title, company, phone number, etc.).

Why it’s important: In short, time spent returning leads is time that could have been spent selling. The strengths of outbound lead generation are its targeting and timeliness. Companies spend money to fill the sales pipeline with targeting leads and enable time-sensitive business goals. Off-target or otherwise unacceptable leads push companies off their timetable and limit the value of outbound timeliness. A typical return rate for outbound leads is 8% – 10%, though agencies that perform additional lead quality screening (such as HiP’s call verification) have been able to reduce rates to under 2%.


2. Lead-to-Close Rate

What it means: Lead-to-close rate represents the percentage of leads that are converted into clients. Lead-to-close rate can be calculated by lead provider, campaign, or asset.

Why it’s important: The purpose of leads is to create sales opportunities. A lead-to-close rate is the most basic, high-level view into the quality of your leads. It’s useful to compare the effectiveness across campaigns and providers. A “good” lead-to-close rate varies greatly by industry and offering. The most effective benchmarks are historical data and competitor/industry data. Obviously, you want to continue exceeding your benchmarks, though it’s important to note that sub-par performance could come from a variety of factors other than lead quality alone.


3. Lead-to-Prospect Rate

What it means: Lead-to-prospect rate is the percentage of leads that move on to become prospects. As per our definition, a lead becomes a prospect when they have demonstrated they are preparing to make a purchase decision through two-way interaction with a rep. In other words, a prospect is a developed lead that is on the cusp of a purchase decision.

Why it’s important: Lead-to-prospect is a more specific version of lead-to-close rate. Lead-to-prospect rate eliminates the factor of closing ability from the equation. Though a prospect is not yet realized revenue, it is an important step in the process. Comparing lead-to-prospect and lead-to-close rates can help to indicate upper-funnel issues. On its own, lead-to-prospect rate is an effective measure of alignment between lead generation campaigns and sales messaging. It’s also a good measure of lead nurture processes. Like lead-to-close rate, lead-to-prospect rates vary greatly from company to company. Again, industry and historical data are the best sources of benchmarks.


4. Call-to-Close Rate

What it means: The call-to-close rate is the percentage of sales calls that result in closed deals. Call-to-close rate can be measured by rep or across the whole sales team.

Why it’s important: Call-to-close rate is the flip side lead-to-prospect rate. Where lead-to-prospect shows issues in the upper marketing-sales funnel, call-to-close can help to indicate issues in the lower funnel. Call-to-close is not just a measure of your sales team’s ability to close. It’s also a good indication of the sales-readiness of the prospects being passed on. A relatively low call-to-close rate might be an indication of a need for further qualification or targeting in the marketing-sales funnel. A 9% call-to-close rate is typically considered strong, though there is some variation based on the offering.



5. Revenue Per Lead

What it means: Revenue per lead is the total revenue derived from a set of leads, divided by the number of leads. Revenue per lead is often compared by lead provider, campaign, or asset.


Why it’s important: Revenue per lead helps to answer the most important question in lead generation: Are these leads worth the costs? Revenue per lead provides a distinct, albeit high-level, value that can be compared with cost per lead (CPL) values to measure ROI. Revenue per lead can be combined with lead-to-close rate for additional insight. Many times, the campaigns with the highest conversion rates don’t produce the largest amount of revenue. Both metrics, side-by-side, are a more comprehensive indicator of value. A good revenue per lead value is two to four times your CPL, depending on your product margins.



6. Time to Close

What it means: Time to close is the average amount of time it takes for leads to become sales. Like many of the other metrics, it’s useful to compare time to close between different campaigns and assets.



Why it’s important: As the cliché goes, time is money. Money in the near-term is inherently more valuable than the same amount in the long-term. Similarly, leads that convert quickly are more valuable than comparable leads that require prolonged nurture. Time to close is a good indication of a lead’s place in the sales process; those who are further in the process will have a shorter time to close. Picking up leads further along in the sales process benefits the company in terms of liquidity and time saved for the sales team. Lead to close provides an additional dimension of lead quality when compared with revenue per lead and lead-to-close rate. An acceptable time to close is entirely dependent on your industry and offering. Historical comparisons are the best source for benchmarks.



Let us know what you think:

  • What metrics would you add to this list?
  • What metrics do you use to measure outbound lead generation?
  • Which outbound lead generation metrics do you find most important?




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Comments (2)

[…] “6 Essential Metrics for Measuring Outbound Lead Generation” (March 19, […]

Great Article! I found it very useful.

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