The High Price of Low-Cost Lists

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The High Price of Low-Cost Lists

MECLABS Reduces Telecom Company’s

Cost per Lead by 60 Percent in One Month

When resources are limited, it can be tempting to purchase

the least-expensive contact list. After all, what’s the

difference between a list that costs $1 per contact and one

that costs $24? The MECLABS Leads Group discovered it’s far

more than merely $23.

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The High Price of Low-Cost Lists

The High Price of Low-Cost Lists

MECLABS Reduces Telecom Company’s

Cost per Lead by 60 Percent in One Month

When resources are limited, it can be tempting to purchase the least-expensive contact list. After all, what’s the difference between a list that costs $1 per contact and one that costs $24?

The MECLABS Leads Group discovered it’s far more than merely $23.

Experiment Reveals the High Price of Low-Cost Lists

Contracted by a leading telecom organization to generate leads, the MECLABS Leads Group proposed conducting an experiment to see how they could do so more efficiently. They decided to identify which list would generate the highest number of leads in the shortest amount of time. The goal: To give their client the best return on their teleprospecting investment.

Experiment: Background and Design

Experiment ID: Telecom organization data test

Location: MECLABS Leads Group Research Library

Test Protocol Number: LG1001 Research Notes:

Background: A telecom organization engaged MECLABS for lead generation

Goal: To determine if higher cost/higher quality data can drive down overall cost per lead by focusing on the most efficient list source.

Primary research question: Which campaign data source will drive the most efficient value?

Test Design: Four multi-source lists, a user-generated list, and a single-source list were tested under consistent experiment conditions, with 300 accounts and 80 hours of teleprospecting.

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The High Price of Low-Cost Lists

Segments Record Cost Validated Multi source 1 $24.00 Phone – role-based

Multi source 2 $14.50 Phone – title-based

Multi source 3 $6.00 Phone – validated

Multi source 4 $3.00 Email - validated

User generated $1.00 Business cards

Single source $0.49 No validation

Experiment Results:

Here’s an overview of how each list performed:

Segments Record Cost Call Per Lead List Count Leads Cost Per Lead List

Cost Call Cost Multi source 1 $24.00 77 1000 312 $373.45 $24,000 $92,400 Multi source 2 $14.50 110 1560 312 $496.00 $22,620 $132,132 Multi source 3 $6.00 127 2475 312 $536.58 $14,850 $152,460 Multi source 4 $3.00 135 2810 312 $546.75 $8,430 $162,278 User generated $1.00 240 9350 312 $954.00 $9,350 $287,980 Single source $0.49 210 13100 312 $828.95 $6,380 $252,175

Teleprospecting professionals had to call 240 contacts to attain a single qualified lead from the list provided from the telecom company. For every 11 calls they made, a lead had to be disqualified – the contact or his organization was simply not within their target market. Furthermore, it turned out 67 percent of the contacts on their list were no longer with the company!

In contrast, only one percent of the contacts on the most expensive list were no longer with the

company. Telesprospectors only had to make 77 calls to attain a qualified lead. How often did they have to disqualify a lead? Only once every 90 calls.

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The High Price of Low-Cost Lists

What you need to understand: The “best deal,” a list that cost $1 per record, would have resulted in a campaign that was more than 2.5 times more costly than a campaign using the “most-expensive” list.

The test proved that a list that looks like a deal at the outset will cost you dearly in the long run:

 Cheaper lists have a higher number of inaccuracies. What are you paying for if nearly 70 percent of the list is worthless?

 It takes significantly more time to produce an opportunity. In the case of the telecom company, the cheaper list would have required nearly three times the hourly investment of the most expensive list to produce a single lead.

Here’s how this plays out in the numbers:

 When you add in both the cost of the list and human resources, the cost-per-lead from the most expensive list was $373.

 The cost per lead from the least expensive list was $950.

 Overall campaign costs would have been $92,000 with the “most expensive” list versus $297,000 for the “least expensive.”

Segments Record Cost Cost per Lead List Cost Call Cost Total Cost

Multi 1 $24 $373 $24,000 $92,400 $116,400

User-gen $1 $954 $9,350 $287,980 $297,330

Difference ($14,650) $195,580 $180,930

60.85 % Decrease in Overall Campaign Costs

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The High Price of Low-Cost Lists

Overall Campaign Costs

The MECLABS approach revealed an important lesson: Cheap lists cause campaign costs to skyrocket when you add in the time spent by your team to eliminate bad data and finally reach a viable lead. In this case, a teleprospecting campaign executed by the cheap list would have cost 2.5 times more than that of the most expensive.

Return on investment is predicated on how much revenue you can drive in the least amount of time. That’s why MECLABS conducts experiments like this to conclusively prove efficiency. We optimize your revenue streams to ensure every penny, and every minute, of your investment is well spent.

$0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000

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The High Price of Low-Cost Lists

Optimize your Sales and Marketing Funnel

MECLABS is a science lab (primary research) with a consultancy (applied research). We conduct rigorous experiments in the new science of optimization and we apply our discoveries to help leaders optimize the financial performance of their sales and marketing programs.

MECLABS has partnered with organizations ranging from Fortune 50 companies to emerging businesses to drive breakthrough financial gains and provide sales and marketing enablement. Current and past Research Partners include:

Learn more about Research Partnership opportunities:

MECLABS.com/engage

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