So, you’ve found your LinkedIn lead generation guru and all systems are go with your well-planned lead gen program — what’s next? Choosing the right LinkedIn lead generation agency is imperative to create a steady flow of incoming leads and ensure the best possible ROI.
Here’s how to tell if your LinkedIn lead generation agency is helping or hurting…
In order to determine whether your campaign is successful, you and your LinkedIn lead generation agency must determine what success looks like from the outset. While results and measurement vary significantly by industry segment and offering, the key performance indicators (KPIs) we most care about for LinkedIn lead gen efforts are:
- Profile views: This figure demonstrates how often your LinkedIn profile is being viewed by users, likely after appearing in relevant searches or from content click-throughs. This is where the LinkedIn lead gen funnel begins, and you should see rapid growth in the number of views initially, then steady growth over time. You can reasonably expect a 3-10X increase in profile views in the first month with the help of a savvy LinkedIn lead generation agency.
- Network growth: As a result of those growing profile views, you should be connecting with more and more users with similar business interests. A 10% network growth rate per month is reasonable if you have less than 1,500 connections. Your network growth will continue steadily, although the growth rate will taper off slowly as you go over 2,000 connections, since it’s not possible to continuously increase the number of new connection invites per month on LinkedIn.
- Content engagement: As your LinkedIn content generation engine begins roaring, response to your content in the form of likes, shares and comments will help determine if your content is relevant to your audience. Expect to see hundreds of engagement actions on your well-positioned LinkedIn content.
- Qualified sales discovery calls: This is where the rubber meets the road. Qualified calls are the ultimate goal for your LinkedIn lead generation agency. The number of calls will vary quite a bit by industry, but you should see at least five solid qualified discovery calls per month — we’ve seen as many as 15-20 — just from your well-run LinkedIn lead generation process.
Measuring ROI is a crucial part of your LinkedIn lead generation agency engagement. After all why waste money if your campaign simply doesn’t work? That being said, settling on just one ROI equation can be tricky due to differences in product offering, price, etc. This is particularly true for high-value B2B offerings with potentially long sales cycles.
Let’s take a deep dive into measuring ROI…
When we talk about ROI in LinkedIn lead gen, what we really care about is Year 1 Customer Value (Y1CV). This means the average profit, in dollars, that you make in Year 1 from the average new customer. We care primarily about Year 1 because that’s what sales teams get measured on — how many deals for how much revenue (or profit) you bring in per year. Sure, Lifetime Customer Value (LCV or LTV) is important if you have long-term recurring contracts, but realistically, there are cost of sale, commission structures and cash flow timing to consider. So, we focus on Year 1 because that’s what you probably care about most in your business, and therefore, with gauging the effectiveness of your LinkedIn lead generation agency.
When we calculate Y1CV, we also need to take into account the length of the sales cycle. If you have a six-month average sales cycle from initial qualification call to closed deal, then you cannot expect a full year’s profit from each lead you close. Say you run an enterprise SaaS software firm or a professional services consultancy. Assuming you make a $100,000 profit per year, then your Y1CV with a six-month sales cycle is $50,000. If your average sales cycle is longer than one year, then obviously the equation is different, and your LCV or LTV must be very high to support a drawn-out sales process.
Once you’ve determined your Y1CV, the next step is to calculate the average value of an initial discovery call with a sales qualified lead (SQL). According to SiriusDecisions, the average deal close rate on B2B sales qualified leads is around 20% across industries, and as high as 30% for very well qualified leads. This rate can vary according to how stringent you are in defining an SQL, but it’s a good benchmark. If you’re closing a lower percentage than that, then your offer or sales process needs improvement.
When outsourcing lead generation, the quality of leads is absolutely critical. Remember, your outsourcing partner is not an employee and does not have the luxury of sandbagging and being highly selective about the lead quality. The most you can realistically ask a LinkedIn lead generation agency for is a good “pre-qualified” lead. In other words, asking the prospect a few key questions and getting a yes response to those questions before scheduling a discovery call for you. Your lead generation partner can put in maximum effort on qualification, and a few unqualified leads will likely sneak through or drop out of the process anyway. That is just the nature of the beast.
So, to taking this into account, what we do is assume a lower closing rate of 10-12% on leads generated by lead gen partners. This is a high-integrity, conservative approach. This DOES NOT mean these leads are automatically lower quality or that you won’t close 20% or more as you normally would. It just means there are more points of failure to consider and your job is to qualify those leads in the initial discovery call.
Again, if your sales team is closing less than 10% of their SQLs, then there is a serious problem with your offering (price, value, features, competition, market need), OR with your sales process (poorly targeted or unqualified leads, poor presentation or bad follow up). In that case, you should find and fix the real problem before investing in outside LinkedIn lead generation agency, because you’d be setting both your lead gen partner and your own company up for failure.
The next step is to calculate the “at the money” value of a qualified sales call. By “at the money” we mean the value of that call in terms of Y1CV. This is achieved by multiplying your calculated Y1CV times your assumed close rate on discovery calls with those SQLs. In our example, a Y1CV of $50,000 times a close rate of 10% gives us an “at the money” call value of $5,000.
Finally, you want to bake a solid ROI into your lead generation investment. We suggest targeting a 300%, or 3X, ROI. This is simple. Just divide the “at the money” per-call value by 3, which gives us $1667. This is the value you would reasonably pay a lead generation partner to get you qualified sales calls. A 3X target ROI gives you substantial wiggle room if any of your numbers are off, and the flow of sales calls will help you optimize your close rate so you generate significantly higher ROI, assuming you stick with the program.
Determine Roles & Responsibilities
A high-yield sales process separates lead generation from the act of nurturing and closing deals. Your lead generation partner should be delivering qualified sales leads.
- If your LinkedIn lead generation agency wants to be gauged only on vanity metrics or activity numbers, then this is not meaningful to your business. Too many sales teams are rewarded for activity, not tangible progress toward a sale.
- If your lead gen partner expects you to do too much of the heavy lifting and still leaves you chasing leads, this is a huge time-sink for you and a clear signal you’re not working with the right firm.
- On the other hand, if you want the LinkedIn lead generation agency to do your sales job, then you make their success impossible. You should expect to facilitate the lead gen process, but if you demand they provide only “ready to buy” leads, you’re setting the process up for failure. And, in the end, having more conversations with the right type of buyer is preferable to not enough conversations. You need qualified sales calls.
Find Common Ground
A good indication that your LinkedIn lead generation agency is helping your business is alignment between their KPIs and your KPIs. You need to be on the same page.
Another good indicator is their willingness to be transparent in their reporting on progress toward those established KPIs. They earn bonus points if they provide access to self-service dashboards with on-the-fly activity reports and monthly results.
Their ability to test and tune, based on actual results and your feedback, is also a good sign. Lead generation (and sales in general) is an imperfect science that requires diligence and two-way interaction to maximize results.
Don’t forget, transparency is a two-way street: You also need to be transparent with your LinkedIn lead generation agency by sharing your “bad prospects” and “do not contact” lists. If you hide that information — or worse — give them your “garbage prospects list” to work, then you’re wasting everyone’s time including your own.
Choose a LinkedIn Lead Generation Agency You Can Trust
If you’re interested in working with a LinkedIn lead generation agency that’s transparent and aligns its results with your KPIs then visit our LinkedIn Lead Generation Services page.