How to Measure and Calculate Your Leads’ ROI

All businesses need a constant stream of new customers to stay afloat. Is it any wonder
then that more businesses and marketers are spending more of their resources on lead
generation? A recent study found that 53% of marketers set aside at least half of their
budget for generating leads.

As a solar or home improvement contractor, you know that generating solar or roofing
leads is key to your success. After all, you are in an industry that is becoming more
competitive day by day, with the number of solar panel installation companies
increasing by 2.3% between 2017 and 2022 .
However, generating leads can be expensive, so it’s essential to make sure that your
lead generation efforts are yielding a positive return on investment (ROI).
In this post, we’ll show you how to measure and calculate your lead generation ROI so
that you can make sure your marketing efforts are paying off.

What is Lead ROI?

When applied to lead generation, ROI measures the profitability of your lead generation
efforts by considering the costs associated with generating those leads and comparing it
to the revenue those leads generate.
In other words, Lead ROI is a metric that measures the profitability of your leads by
telling you how much revenue you’re generating for each lead you bring in.
To measure your lead generation ROI, you need to consider two things:
·The cost of generating each lead
·The revenue that each lead generates

The cost of generating a lead includes all the money you spend on your marketing and
advertising efforts, including staff salaries, software, and other associated costs.
The revenue generated by a lead is the total amount of money that the lead spends with
your company. This includes the revenue generated from selling them a product or
service. It also includes any other ancillary services they may purchase from you, such
as installation and maintenance.

Is Lead Generation Profitable?

In most cases, lead generation can be profitable. However, for lead generation to be
profitable, the revenue generated by each lead must be greater than the cost of
generating that lead.

The profitability of your lead generation efforts will depend on several factors, including your cost per lead, the quality of your leads, and your conversion rate. For example, let’s say it costs you $100 to generate a lead, and that lead spends $1,000 with your company. In this case, your lead ROI would be 900%.

As you can see, the profitability of your lead generation efforts depends on your conversion rate. The higher your conversion rate, the higher your ROI will be.

How Do You Calculate ROI for Lead Generation?

Can you remember the last time you calculated your lead ROI? If not, it’s probably because calculating lead ROI can be a bit complicated.
The simplest formula for calculating your lead ROI is to take your total revenue
generated by leads and divide it by your total cost of lead generation. This formula will give you your ROI percentage.

However, this formula is too simple and does not consider various factors that may
affect the profitability of your lead generation efforts, such as your conversion rate. A more accurate formula for calculating your lead ROI considers the Customer Lifetime
Value (CLV) and the Customer Acquisition Cost (CAC).
More Insight into Customer Lifetime Value (CLV)

CLV refers to the total amount of money a customer spends with your company
throughout their lifetime, buying your goods and services. To calculate your lead ROI
accurately, you need to take into account the CLV of each lead.
Understanding your CLV is relevant to your lead generation because it gives you more
insight into how much revenue your business generates every time you have a new
client. CLV also tells you how much money you need to invest in acquiring the new
customer..

So How Do You Calculate CLV?

Let’s say you’re a solar contractor and make $100 from each of your customers every month. Also, let’s assume that the customer continues doing business with you for four years. You’ll get the CLV by multiplying the monthly revenue you get from each customer by 48 months (4 years).

This will be $100/month*48 = $4,800. While this CLV formula is basic, it is an excellent starting point for calculating your lead ROI. With the CLV, you can get the cost of customer acquisition (CCA). This is the money
your business is willing to spend to acquire a new customer. The figure will help you
determine your lead generation ROI.

Let’s say your allowable cost of acquiring customers is 10% of your CLV. Returning to
our initial example, where the CLV was $4,800, your CCA would be $480. This is the
amount that your solar company will be willing to spend to attract a new customer.
Using the CLV and CCA to Calculate Your Lead ROI
Still using our solar contractor example, assume that you allocate a budget of $480,000
to your marketing efforts, with 10% set aside for lead generation. 10% would be
$48,000. Going by a CCA of $480, you will need to generate 100 or more leads for your
ROI to be positive.

Your break-even point will be 100 leads. Once you know how many leads you need for
a positive ROI, you should compare the results to see whether you’re reaching the lead
goals necessary to generate a positive ROI.
To get your lead’s ROI, you’ll need to take the total revenue generated from leads,
subtract your total cost of lead generation, and then divide that number by your
customer acquisition cost.

For example, if you generated $10,000 in revenue from leads last month, spent $1,000
on your lead generation efforts, and your customer acquisition cost was $480, your ROI
would be 1,875%. Ideally, you want your ROI to be as high as possible. A lead ROI of 1,000% would mean
that for every $1 you spend on generating leads, you make $10 in return.

A Simpler Way If you want to avoid all this math, you can use a lead ROI calculator . All you need to do is key in the data and let the calculator do the rest. For example, if you’re using the ROI calculator from LL Media, you will need to key in
data on the average cost per lead, the average number of leads per month, and the
number of appointments you have with these leads. As demonstrated in this video , the
calculator will give you the current cost per acquisition.

What is a Good Price Per Lead?

There’s no magic number when it comes to the price per lead. A good rule of thumb is to look at your overall marketing budget and figure out what you can realistically afford to spend on each lead. Once you have a general idea, you can start testing different prices to see what works best for your business.

Remember that the price per lead is just one part of the equation.You also need to ensure that you’re generating high-quality leads that will likely convert customers. With a little trial and error, you should be able to find the perfect price point for your business.

How Can I Get Solar Leads Without Knocking on Doors?

Getting your solar leads doesn’t have to be a hassle. There are plenty of ways to
generate leads without knocking on doors.

Examples include: Using Lead Generation Software These software programs often come with features that automatically capture leads. For
example, many lead generation software programs can capture leads from your website, social media pages, and online directories. They can also send automatic email follow-ups, making it easy to stay in touch with your leads. Buying Leads If you don’t have the time or resources to generate your own leads, you can always buy leads from a lead generation company. Buying leads is a great way to get high-quality,
targeted leads that are interested in solar energy. By buying leads, you’ll be able to target homeowners who are already interested in solar power and are more likely to go through with a purchase. When you purchase leads, you can specify the type of customer you are looking for, and the lead provider will only sell you leads that match your criteria. This ensures that you are only paying for leads that are relevant to your business. Social Media By creating relevant and engaging content, you can attract leads who are interested in
learning more about solar power. Once you’ve built a rapport with these leads, you can start selling them the benefits of solar energy. Remember to post regularly and to interact with your followers, as this will help you to build trust and credibility.

How Much Should I Pay for Solar Leads?

Lead generation companies typically sell pre-qualified leads that have already been vetted, so you won’t have to spend as much time and effort to close the deal. While the cost will vary, you should not pay for invalid leads. Invalid leads are leads that are not interested in your product or service, which means you will never be able to close the deal.

The best companies, like LL Media, will not ask you to pay when signing up for their lead generation program. They will also let you determine the initial amount you intend to put in your account.

How Do You Get Solar Leads

One of the best ways to get solar leads is to ensure that your company appears in online directories. Homeowners interested in solar power will often search for solar companies in their area. So you should ensure that your company comes up when
they’re looking. You should also build a strong social media presence on platforms such as Instagram.
Ensure that you post your work on these platforms to attract leads who are interested in what you do.

It’s also vital to encourage referrals from your satisfied customers by offering them
incentives. Ask your customers to leave reviews on popular platforms such as Google
and Yelp, as this will help you to attract more leads.
Don’t forget about targeted ads. You can use platforms such as Google to target
homeowners who live in areas with high solar potential. By targeting your
advertisements to these homeowners, you can ensure that your message reaches
people who are more likely to be interested in going solar.

How LL Media Can Help You Get Solar Leads

LL Media will be your reliable partner if you need qualified solar leads. Every year, we
partner with hundreds of solar installation contractors looking to grow their business.
Our goal is to ensure they have access only to the highest quality leads.
We understand that you will be spending your marketing budget to purchase leads. As a
result, we’re committed to ensuring that we only send you the best leads that match
your target audience. The best thing is that we will target your audience based on
different factors like home type, roof type, utility bill, and home value.
LL Media is also growth-minded, meaning we will focus on improving our service based
on your feedback.

How Our Leads Will Benefit Your Business

Solar leads aren’t the only type of leads you will get from LL Media. You will also get access to roofing and window leads.
These are homeowners who need your services but haven’t been able to find you. We
will help you connect with them so that you can provide them with the services they
need.

All our leads will benefit your business because they are validated using real-time data.
Our company identifies variables indicating trends that yield qualified leads. For
instance, if a person uses a phone number indicating that they are a pre-paid carrier, it
means they don’t qualify for solar. We won’t include such people in our lead list.
Another advantage is that our experienced partners will help you grow your business by
connecting you with viable prospective clients. Our company will help you scale and
reach a nationwide audience since our list has leads from across the country. You will
be well-positioned to scale your home improvement business by reaching more
customers.

If you would like to scale your solar or home improvement business with qualified leads,
contact us today. We will give you access to leads that set your company up for
success.