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Return on Investment
ROI of Outsourcing Lead Generation
Global Marketing Technologies provides account profiling and lead generation services in the UK, Ireland and other European countries. The reason for using these services is ultimately economic. To make economic sense, customers who sell directly have the following profile: they offer a solution, or a service that can be presented as a solution. A sale is high value. Value may be an up-front licence fee or an ongoing revenue stream, or a mix of licence and services.
If a new customer does not generate the equivalent of £50,000 in revenue, it is unlikely that the economic return on investment (ROI) will work. The return on investment is based on improving the effectiveness of the direct sales force so that they close more sales. That means that customers must have a direct sales force, usually highly paid and compensated by a mix of salary and commission.
To receive a free assessment of the economics of outsourcing the lead generation process in your company, please complete the short form below. We will treat the information you supply as confidential (see Privacy Policy). Please supply a contact name, company and number in case we have questions. We cannot respond to anonymous submissions. We will email you an outline of the economics and the methodology and assumptions used in the calculation. If the economics make sense, we may offer to come and meet you.
Comparing In-House and Outsourced Lead Generation
When calculating costs associated with in-house lead generation, costs are often collected and presented in traditional cost accounting terms by looking at department budgets.
|
Example |
|
|
Expense Category |
Annual Amount (£) |
|
Salaries (3) |
120,000 |
|
Fica, FUTA, SUI etc. |
12,000 |
|
Health and Benefits |
18,000 |
|
Overhead |
18,000 |
|
Facilities Cost |
24,000 |
|
Telephone |
24,000 |
|
Consumables |
12,000 |
|
Annual Department Budget |
228,000 |
|
Available monthly hours 125 per person |
|
|
Cost per hour |
51 |
|
Cost per lead range |
475 to 317 |
Activity Based Cost View
Activity based costing has been widely adopted to replace traditional budgeting in service industries. This methodology gives a much clearer picture of cost behaviour for management decision making on issues such as outsourcing.
Further reading can be found under ABC at www.cimaglobal.com (the Chartered Institute of Management Accountants) and www.imanet.org (the Institute of Management Accountants).
In the activity based cost view, all activities are shown with their resource consumption. Assumptions include turnover and training requirements; this view factors in management, training, IT support and recruitment.
Lead generation process
|
Activity |
Resource |
Consumption |
Annual Cost (£) |
|
Management |
Sales Management |
280 hours |
28,000 |
|
Supervision |
Senior Inside Sales |
280 hours |
14,000 |
|
Recruitment |
HR |
80 hours |
8,000 |
|
|
Advertising |
5 ads |
2,500 |
|
|
Sales Management |
10 interviews |
2,000 |
|
|
Senior Inside Sales |
10 interviews |
1,000 |
|
Training |
External Skills Training |
16 classes |
16,000 |
|
|
Inside Sales Team |
32 days |
11,200 |
|
IT support |
Help Desk |
32 days |
3,000 |
|
|
Database assistance |
20 Campaigns |
4,000 |
|
Calling |
Inside Sales Team |
4,500 hours |
178,800 |
|
|
Telephone |
4 lines |
24,000 |
|
Total Process Cost |
291,700 |
||
|
Cost per hour |
65 |
||
|
Cost per lead range |
607 to 405 |
||
