Why KPIs Are Important

…And which one you should consider using.

Author: Cassie Carlon, NextGen Leads’ Director of Sales

Do You Know How Much Money You’re Making?

Aside from the instant gratification of making a sale, how do you measure the success of your lead purchases? More importantly, how do you know how much money you are making from each sale?

Key Performance Indicators (KPIs) are an essential part of measuring the success of any marketing efforts, especially when it comes to buying online leads.

Using an objective and measurable KPI allows you to scale your lead buys, make adjustments to filters, and of course, track how much money you are making!

Simply put, we understand that poor lead performance results in short-lived business relationships. At NextGen Leads, we’re in it for the long-run. So, we encourage buyers to not only objectively track the performance of their leads but provide feedback and reporting on their performance so we can make the necessary optimizations and adjustments to reach their targeted KPI.

Believe it or not, only ~20% of our buyers actually do this. The lead budgets of that 20% have grown substantially within the past year as a result of their transparency in reporting and constructive feedback. Our goal is to emulate that success with all our customers, so I’ve provided a quick overview of the most commonly used KPI used to reach that success — CPA.

Cost Per Acquisition (CPA)

What is CPA?

Cost Per Acquisition, sometimes referred to as Cost-Per-Sale, is the most commonly used and most effective KPI to use when tracking lead performance. CPA is a metric used to measure your allowable total lead cost before acquiring a sold policy.

Total Lead Cost / # of sales = CPA

What should my CPA be?

Targeted CPA varies by business type (i.e. individual agent, agency, carrier, brokerage), type of policy sold, and payable commission. For health insurance, the most common CPA target amongst all customer types is $200.

So, let’s say you purchase 100 Exclusive Leads at $10 each.

100 leads * $10 = $1000 Total Lead Cost

You would have to sell 5 of those leads in order to hit your targeted CPA and be profitable.

$1000 Total Lead Cost / 5 sales = $200 CPA

Why is CPA so important?

What’s most important about buying sales leads? If you ask me, the answer is: making sales. Tracking your CPA allows you to see how much you have to spend before making a sale, as well as tracking profitability of your lead buying efforts. Presumably, if you’re profitable with your lead buys, you’ll continue to invest more and increase your budget. Bottom line: When you make money, we make money. We think that’s pretty important.

How do I use CPA to my advantage?

As previously mentioned, providing feedback and disposition data on the leads you receive from NextGen allows us to make internal optimizations and source adjustments to help you achieve your targeted CPA. When you share your performance data with us, we will work with you to make your lead campaigns profitable so you can maximize your sales and grow your lead budget. Want to know more about the specifics of our internal optimizations? Contact our sales team more information or stay tuned for future posts on this topic!

Already a customer with us? — Great! Send us a disposition report and we’ll show you exactly how we make these optimizations and what adjustments we will make to help you reach your targeted CPA.

Looking to get a test started? — Contact our sales team for a free consultation and we’ll walk you through the lead process and set your lead campaigns up for success. There are no contracts, obligations, or funding minimums. Let us show you how to best work your leads so you can focus on what you do best — SELLING INSURANCE!

Contact Us:

P: (877) 817–3853

E: sales@nextgenleads.com