Resources Hub » Knowledge base » How Do You Calculate the ROI of Lead Nurturing?

Lead nurturing through email campaigns is a popular way to build relationships with potential customers and ensure your brand is in the forefront of their minds.

And according to a study by eMarketer, 64% of B2B marketers use email campaigns to nurture leads.

What is lead nurturing?

Lead nurturing is the relationship that a brand builds with the customer throughout every stage of the sales funnel. Marketers are in constant communication with their prospects when they listen to a prospect’s needs and provide answers to entice a sale. This process is a strategic way to lead score buyers and push them through a content marketing plan.

Lead nurturing benefits include:

  • Accelerating the sales cycle
  • Educating potential customers
  • Increasing revenue by creating new opportunities with cold leads
  • Building brand and product awareness
  • Producing qualified leads

What is ROI?

Return on investment (ROI) measures the overall gain or loss generated by the money invested in a particular campaign or action. ROI is typically used to create long-term campaign goals and determines the success of a particular strategy.

How to measure the ROI from your lead nurturing campaigns

You can simply calculate lead nurturing ROI by analyzing the revenue produced from nurtured leads and compare to those not nurtured. This can be done by calculating:

  • Current monthly revenue from leads: New Leads X Conversation Rate X Average Sales Price
  • New monthly revenue from nurtured leads: New Leads X Increased Conversion Rate X Increased Average Sales Price

After you have those numbers finalized, you need to calculate the difference between the two. Subtract your estimated monthly revenue after nurture from the new generated leads each month. This will be the estimated lead nurturing on investment.

For example, if you have $5,000 in revenue each month from leads and $8,750 in surplus from monthly revenue from new nurtured leads, you’re left with $3,750. Lead nurturing essentially gives an additional $3,750 per month, which results in an increase of $45,000 revenue annually. That’s a 75% increase from effectively lead nurturing potential clients.

If you’re not lead nurturing, money is actively being left on the table every month.

Does it matter?

Determining your lead nurturing ROI is critical in understanding your campaign’s overall success. Huge ROI exists for those marketers who are willing to develop a consistent lead nurturing strategy.

While the ROI speaks for itself, those nurtured leads will most likely become your most loyal customers because you spent the time learning their behavior and responding to it. They will likely purchase more, spend more, and send more referrals your way.

If you’re serious about increasing revenue, lead nurturing ROI certainly matters if you’re ready to grow your marketing strategy. In fact, if you’re still on the fence about lead nurturing, it’s likely your competitors are already implementing this strategy and becoming the more active voice to your customers.

What Now?

Now that you’ve learned about what lead nurturing is and how to calculate its ROI, you’re ready to start implementing this into future campaigns. The first step is creating a lead scoring strategy to build a framework for your potential customers to move through during the sales cycle.

When done correctly, lead scoring is the backbone of any good lead nurturing campaign and will result in higher ROI. Once you have this squared away, you can begin developing engaging email content that will keep your customers interested, such as powerful headlines.

This blog provides general information and discussion about email marketing and related subjects. The content provided in this blog ("Content”), should not be construed as and is not intended to constitute financial, legal or tax advice. You should seek the advice of professionals prior to acting upon any information contained in the Content. All Content is provided strictly “as is” and we make no warranty or representation of any kind regarding the Content.

Get started with Campaign Monitor today.

With our powerful yet easy-to-use tools, it's never been easier to make an impact with email marketing.

Try it for free