How to Reduce LinkedIn Cost Per Lead for LinkedIn Outreach Campaigns
When it comes to B2B lead generation, no one does it better than LinkedIn. Year after year, the professional social platform steals the show for the best B2B lead generation platform. That’s because 40% of marketers see LinkedIn as the most effective channel for generating high-quality leads.
While LinkedIn promises a world of high-quality leads, some marketers are reluctant to invest in the platform due to its cost of lead acquisition. This leaves more than half (over 58%) of marketers today facing growth challenges.
Similarly, LinkedIn B2B lead generation is not as simple as throwing up profiles and hoping for the best – there’s so much to take into account in your next campaign.
So, are you finding it difficult to reduce your LinkedIn leads’ cost per lead? Do you wish there was a way to generate more cost-effective leads from your LinkedIn campaigns? How about reducing the number of leads that are unqualified and not a good fit for your business? You’re not alone. In this article, we’ll explain our favorite ways of reducing the lead cost from LinkedIn.
What Is the Cost Per Lead?
Cost per lead (CPL) measures the total amount of money spent on a marketing campaign divided by the number of leads generated from that campaign. It is used to measure the return on investment of a particular lead generation campaign. A low cost per lead indicates that there was little waste and more value in spending that amount on the campaign.
When calculating CPL, you need to take into account:
- The cost of creating your ads
- The cost of the resulting clicks/impressions, and
- The value of those leads
You can use CPL to compare different marketing channels and see which one is the most effective at generating leads at the lowest cost. The lower your CPL, the better.
How to Calculate Cost Per Lead for LinkedIn Leads
To calculate the total cost per lead for your company’s LinkedIn ads, you’ll need to know how much you’re spending on each ad campaign and how many leads your ads are generating. If you spent $1000 on a campaign that generated 100 leads, your cost per lead is $10.
In practice, spending only $10 for every lead sounds too good to be true. On average, LinkedIn leads cost $75. This number is subject to the platform you use and the campaigns that you run.
As you can see, the cost of acquiring a new customer on LinkedIn is high for B2B marketers. In any given scenario, the average cost per lead for a B2B business will be higher than for a B2C business. This is because B2B businesses often have access to smaller, niche-focused professionals, making it easier to generate leads and drive sales.
Average Cost of LinkedIn Outreach Campaigns
LinkedIn outreach is more of a long-term strategy that costs both time and money. While no initial capital is required to get your campaign up and running, a lot of time and resources go into the campaign if you opt to do it yourself. Smart marketers know that time is precious. Besides, why go through all the hassle when you can have someone else do it for you?
LinkedIn lead-generation services and tools promise the best of both worlds in time and money savings. In essence, the lead generation agency undertakes your LinkedIn B2B lead generation strategy and does everything for you; from creating the connection request message, to managing your connections, and your entire LinkedIn outreach strategy. This way, you have more time to focus on what matters the most – growing your business.
These services could charge in a subscription model or on a pay-for-result basis.
Cost of LinkedIn Ad Campaigns
It’s worth pointing out that there’s no size fits all when it comes to LinkedIn ads. To run your ad on LinkedIn, you need to have your minimum daily budget set to $10. The cost of LinkedIn ads averages between $5 to $6.5 for both cost per click (CPC) and cost per 1000 impressions (CPM).
LinkedIn ads are sold through an auction where advertisers bid for attention from the same audience. Of course, your bidding strategy has a vital part to play in the total cost of the campaign. You can choose between automated and manual bidding. The maximum delivery bidding strategy (automated) uses LinkedIn’s algorithms to place bids automatically and make the most of your budget. Manual bidding gives you more control over your bid.
A successful B2B marketing campaign will take into account several important factors when calculating the cost per lead.
Here are four things you need to know before getting started:
Define your lead-calculation parameters
When calculating cost per lead, you will need to establish a few parameters, such as cost per sale, cost per click, and cost per lead. Remember that cost per lead will be calculated differently for different marketing campaigns. You will also need to decide what additional metrics you will use to calculate cost per lead.
2. Plan ahead and set a budget
We can’t stress enough the importance of budget planning in your marketing campaign. Comparing the number of leads you drive in your campaign against the money you spend will allow you to assess how effective your B2B marketing campaign is. Figure out how much the whole thing will cost beforehand.
3. Find out what a lead is worth to your company
Disqualifying unsuitable leads has a proven impact on your campaign’s performance. One way is to use data from your last marketing campaign to find out what each lead is worth to your company. Another way is to do some research and hold a survey to find out how your customers view your business.
4. Don’t forget to include other marketing costs
Other than the cost per lead, there are several other campaign metrics that fit into the bigger picture. They include overhead costs, campaign design costs, advertising, and more. Focus only on the campaign metrics most relevant to your campaign.
Lead generation campaigns can be complex and difficult to measure. However, cost per lead is a useful metric that allows you to assess the efficiency of your campaign.
What are the Main Spending Areas for LinkedIn Leads?
We all know that lead generation is important for your company’s growth, but where should you prioritize your lead gen activities? If you can’t answer that question, chances are you haven’t identified where your LinkedIn B2B lead generation budget goes.
Here are the spending areas to focus on:
- In-mail messages – In-mail messaging is a classic lead-generation tactic that is still remarkably effective because it cuts right into the prospect’s inbox. LinkedIn allows you to send a direct message to prospects to whom you are not connected yet. However, this feature is not available in the free version. You must be subscribed to one of the premium options, such as the Sales Navigator Plans. Even so, you only get 5- 50 In Mails per month, depending on your plan, and more will not be provided until the next billing cycle.
- LinkedIn Ads – Companies spend a good share of their marketing budget on the LinkedIn ad auction. If you want to get more leads from your LinkedIn advertisements, you need to optimize your ads. In terms of ROI, LinkedIn ads are relatively expensive compared to other paid marketing options. But if you optimize your ads and get them running at peak performance, they can generate significant B2B leads.
- LinkedIn prospecting – Prospecting is basically like cold calling. The difference is that you’re doing it via LinkedIn messages. Unfortunately, many marketers also seem to get in touch with people who are never going to buy. Generic lead generation services are partly to blame for this, and they cost a lot too.
Sales and marketing experts have a lot to track and report to the executive team. Usually, this is done manually on basic spreadsheets, which costs time. No matter how you see it, lead generation is a tough challenge for most businesses.
How to Cut Costs for LinkedIn Cost Per Lead
LinkedIn costs are higher than most businesses can afford to keep up with. Even so, you’d be surprised at how straightforward many of the cost-reduction strategies can be.
It all comes down to a few fundamentals. Get your target audience and their needs in mind, make sure that you have a product that they want to buy, and then find ways to get your business in front of them. Sounds simple, right? It’s not that simple.
Have a Clear Marketing Strategy
Before you even think about reducing the cost per lead for your business, you need to have a clear marketing strategy in place.
- Why do you want to advertise?
- What is your target audience?
- What are you trying to accomplish with your advertisements?
Your marketing strategy will impact the objective of the campaign, which you may not be able to change once you sign up for LinkedIn ads.
A/B Ad Testing
As said earlier, there’s no one-size-fits-all when it comes to LinkedIn lead generation. As such, marketers test their campaigns to see what works and what doesn’t. A/B testing is where you create two different versions of a message and show both of them to two different groups. You then compare the effectiveness of both advertisements and use the results to inform future decisions.
Ad testing is a method of optimizing your ads by measuring the performance of two or more versions of an ad and choosing the one that performs best. The outcome is based on the variants, such as the creative, delivery, and audience.
Other variants include:
- Ad headlines
- Image
- Message body
- CTA
Spending too much on ads that don’t work won’t help cut down the cost of the campaign. With testing, however, it’s easy to see which ad strategy has a much higher chance of success. That’s the magic of A/B testing.
Audience Targeting
Targeting the people who are most likely to buy drives high-quality leads for your business. LinkedIn allows you to target individual users based on their education, job title, company, industry, location, groups, and so much more. Here are a few follow-up questions:
- Why are these people likely to buy your products?
- What do they like?
- What do they hate?
- What does a customer need to do or say to indicate that they are ready to buy?
If it helps, go as granular as you can. For instance, rather than just targeting leads by job title, target them by their job function. Most sales and marketing experts focus on attracting key decision-makers, which is more expensive. However, you can get away with targeting lower-level leads.
The more specific you are with your audience, the less likely you are to waste money on campaigns that won’t work.
Leave it to the Pros
We saved best for last because when it comes to lead generation, no one does it better than the people who have lived in the industry long enough. We’re talking about the outsourced lead generation services that allow you to establish your lead gen campaign for a fraction of the cost.
Such lead gen programs have been developed in collaboration with sales and marketing experts. As such, you’ll find all the assets you need to kickstart your campaign and have control over vital variables.
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Conclusion
As long as you have a clear lead generation strategy and are willing to put in the time and effort, you can decrease the cost per lead for your business. It will require some trial and error, but if you follow the tips and advice in this article, you should see some positive results.