All is Vanity was a song by the Manic Street Preachers and when asked about its meaning vocalist James Dean Bradfield told the NME that this song “deals with just hating those momentary lapses of just falling into narcissism” and in this article Dennis Shiao shares how this can happen for marketers, as we focus on a vanity metric and miss something. We’ve all done it!
This is the tale of what happens when marketers focus (obsess, even!) on a single metric.
The metric is Cost Per Lead (CPL) and the channel is Facebook ads. But let me take a step back.
I ran content marketing for DNN Software. Our product was a Content Management System (CMS). The majority of our customers were mid-market and we were looking to move up-market (in other words, to sell our product to enterprise companies).
An eBook that rocked the world (sort of)
I had a colleague that ran demand generation. We were partners in crime. I’d develop content and he’d instrument that content in paid campaigns (such as pay per click, syndication, paid social and more). We’d work closely on the content calendar, including topics, themes and content assets for a given quarter.
One quarter, I hired a content marketing agency to develop an eBook (white paper) for us. I determined the topic and outline, while the agency wrote the content, developed creative elements and delivered the final product in the form of a PDF.
The title of the eBook?
“How to Build Killer Websites.”
Judging a book by its cover
The eBook was a hit!
I was pleased with the content, but what I think made all the difference was the cover page.
The agency did a great job with the imagery on the cover page: a hand-drawn scene that showed a man riding a big wave on a surfboard. Behind the surfboard was a shark with its mouth open. The man is shown calmly balancing on the surfboard, holding a laptop in his hands with a website on the laptop screen.
You know, building a killer website while being chased by a shark.
I think we generated a fair number of leads by the cover page alone. I could imagine users saying, “Who cares about the content! I’m giving up my personal information for this awesome cover page.”
Optimizing for Cost Per Lead (CPL)
This eBook performed well organically on our site. Without paid promotion, users would discover it on our website and complete the registration form to download it. But then came Facebook ads.
We had a consultant on the team who specialized in paid social campaigns. We uploaded the contacts in our house list and used the now-infamous Lookalike Audiences feature to have Facebook find users who looked like our existing leads and customers.
Our consultant had a talent for tweaking, tuning and optimizing all the different knobs within the Facebook ads machine. He got us to a point where we’d generate hundreds of leads at a CPL under $10. This is a fantastically economical price to spend in B2B.
Leads, leads, leads.
We loved them. Why?
Because we knew the conversion rate for each step of our sales funnel:
- Marketing Qualified Leads (MQL)
- Sales Qualified Leads (SQL)
So long as we kept the top of the funnel (that’s the leads) full, we knew that, based on historical conversion percentages, a certain number of deals would come out the other end.
As a result, we celebrated this result:
X number of leads generated this month, at a CPL of under $10
And because of this result, we doubled down, spending even more to promote this eBook using Facebook ads next quarter and the quarter after that.
Taking our eye off the prize
But then it came to a crashing halt.
By moving so quickly to celebrate and double down, we took our eye off the prize. It turned out the leads generated by this eBook didn’t behave like leads generated in past campaigns. We had a far lower conversion rate for each step of the funnel.
In fact, we had zero leads progress to opportunities or closed/won.
Why was that?
Because we attracted audience profiles that didn’t match the product we were selling. Our CMS ran on Microsoft’s .NET framework. You had to pay thousands of dollars to license it. If you don’t have that money to spend and are not a .NET shop, you’re not a viable prospect.
In other words:
Lots of people want to build killer websites, but far fewer are equipped to do so with our product.
In fact, some were intrigued with the topic of ‘killer websites’, but weren’t in the business of building websites at all! One of our leads was a virtual assistant who didn’t know what a CMS was.
The lesson learned?
Always judge a performance metric in the larger picture of overall business goals.
Before celebrating a low CPL we should have assessed, early on, whether the leads were converting to MQLs and SQLs at rates that matched our historical benchmarks. Had we determined that they did not, we could have pulled back on further ad spend and gone back to the drawing table with a different eBook.