How Many Leads Should I Be Getting from My Digital Marketing?

Are you spending too much on your SEO and PPC ad campaigns? To help you determine if you're getting enough leads to justify your budget, we're offering industry benchmarks that you can compare against your current cost-per-lead and lead closing rates.

Measuring Your Cost-per-Lead

The numbers below are courtesy of Delta Media Group, a website and marketing solutions provider. The data comes from a sampling of their current marketing clients. Here, a 'lead' is considered an online user who engages with a website in a meaningful way (e.g., signing up for listing email alerts, requesting a showing).

To compare your cost-per-lead to the number below, divide what you spend on each marketing method by the number of leads you receive from that method on a monthly basis. Put mathematically, that's:

So how does digital marketing spend compare? Take a look at the numbers below to find out:

• Search Engine Optimization: $8-15 per lead
• Pay-per-Click advertising: $8-35 per lead
• PPC advertising in luxury markets: up to $90 per lead

If your results are higher than the numbers above, you may want to tweak your current campaigns. Are your PPC ads stale? Do you need to target different keywords? Are your SEO practices up-to-date with the latest search engine algorithms?

If you work with a marketing company, give them a call and talk about how you can improve your cost per lead. You can also research other companies--but be sure you ask what kind of cost-per-lead their typical clients see before you sign up for anything! A reputable company like Delta should be happy to provide these numbers.

Compare Closing Rates

It's just as important to measure lead quality as it is to measure their cost. In fact, these two data points are related. For example, if your cost-per-lead is relatively high but the leads you receive are higher quality--that is, they result in a closed transaction--then it's easier to justify the bigger spend. On the flip side, leads that are cheap to acquire but rarely close may not be worth what little you do spend.

So how many leads should agents and brokers expect to result in a completed home sale? According to Delta, their clients close an average of 12 percent of all leads generated annually.

When brokers use a competitive lead distribution model, this number climbs to 20 percent. Brokerages that use a protected model see a typical closing rate of under 5 percent.

Wrapping Up

Both PPC and SEO can be very effective and affordable methods of lead generation when executed properly. Keep an eye on their performance by tracking the value each method provides your business. Simply monitor your digital spend and closing rate using the methods and benchmarks above, and you'll be able to track the return you are getting on your marketing investments.

If you are interested in knowing how many leads you should be receiving based on the number of visitors to your site, click here for an easy-to-use tool to find out.