Cost per Lead -Pharmaceutical Industry?

[awolski]

Hi there,

I'm trying to gather some info for a client call that I have coming up. They are asking for us to beat our previous marketing campaign results which were a 20% conversion rate and a $4.33 Cost Per Lead.

I am trying to gather some CPL statistics in various market industries to show that the $4.33 CPL was a bit out of the norm and not generally within industry standard.

Anyone got some info?

FYI: This client industry is Pharma.

Thanks!

A

[Discovery]

Pharma is a multi billion dollar industry with just about as many products and services. What kind of lead are you talking about generating specifically?

A pill - Yes $4 may be high
A molecular simulation software package that goes for 200k then no $4 is not too much for a lead.

Discovery

[B-Double-U]

Hi Awolski,

I am working with several Pharma's and have been in the industry since since 97, so I have seen may programs out there and tried and still use may others.

It sounds to me like those numbers are very good, as we are currently set to turn about $10-15 cost per acquired lead. Now, there are may assumptions that we are making here..... so take that with a grain of salt. Our leads are prequalified and have an extremely high rate of conversion.

So, I guess it really matters if a lead that you are providing has a high (<25%) chance of conversion.....

[PPC]

A pill - Yes $4 may be high
A molecular simulation software package that goes for 200k then no $4 is not too much for a lead.

True, but I would think 20% conversion on that would be tough to beat. :)

[Tlaserx]

Let's play pretend. Let's say I'm a sales rep that works for a pharma company. Say your firm can offer me 100 leads for $25 each. $2,500 total. Each of them has a 50% chance to close (That's really about as good as a personal referral, so I'd have to see that to believe it.) but let's say it's real :p

Now let's also pretend that someone else can offer me 500 leads that I pay $5 each for. Same $2500 total. Now, these leads only have a pre-qualified %15 percent chance to close. Which should I choose?

Without a doubt, I would pick the second group. First of all, there's slightly more sales generated. Second, you get 400 more touch calls than the first group and it shouldn't take more than 3 minutes to qualify a customer. Going this route, I've got 400 more people to market in the future.

Why did I say all this? -When I hear companies saying they only want to buy leads with the best closing ratios, it makes me cringe. You are normally much better off getting your closing ratio's just above 6% and then getting your professional reps on the phone to do their jobs. Long term, that 6% grows with follow up calls.

The extra leads create a big flow of work, gets them in the habit of asking the right questions and teaches them to qualify leads quicker. It's just an all around better situation. I speak from much experience.

If your client is asking you to maximize closing ratios above 20%, something sounds seriously upside down to me. They are leaving lots on the table for their competiton. It doesn't matter what industry they are in, it sounds like they are sitting on a pack of Prima-Donna sales reps who don't have the guts to call less than perfect leads. (please forgive my humble opinion)

Perhaps they would respect your firm giving hard numbers showing they would sell more and get more exposure to their potential customers by accepting lower closing ratios? :)