Day after day we constantly turn down new potential clients because the expectations of the client either are not realistic or the client doesn’t understand their true cost of doing business.

Here is a scenario to illustrate how to calculate costs.  First we need to understand some basic terminology that we use:

Cost Per Call – This is any raw call that hits your call center switch (this can be repeat customers, wrong numbers, short calls, hang ups, marketing calls, etc….)

Cost Per Unique Call – This is any non-duplicated call that hits your call center switch.  (typically non-duplicated calls are calculated weekly and sometimes monthly depending on what you have negotiated with your media partner)

Cost Per Lead - Generally this would be a call based on time duration 30/60 second or longer unique connected.

Short Calls - (this can be repeat customers, wrong numbers, short calls, hang ups, marketing calls, etc….)

Cost Per Order/Deal – Total cost of media divided by total closed orders = gross cost per order

Pay Per Call – Where the advertiser pays a fixed rate per gross unique call

Most clients are familiar with cost per call or pay per call advertising, but what they fail to realize is the true costs of these calls and the way in which the calls are generated.

Quickest way to assess your marketing efforts

If the following:

Typical Cost Per any Call = $45 – $55

Typical conversion of raw call to lead (lead defined as a consumer who stays on the call for 3 minutes or longer) = 25%

10 calls x $50 (average Cost Per Raw Call) = $500

Average cost per qualified lead $500*25% = $125

Typically as high 30% of raw calls will never make it to a live agent and of the calls answered on average about 30% of the clients will qualify for the program.  This plays out when you are purchasing calls that are on a round robin system which will greatly increase short calls, mis-dials and consumers looking for a different company that may have been receiving the calls before you.

It is important to note that you should actively go after your short calls since you will re-contact as many as 20% of the total outstanding short calls.  In today’s environment many consumers are locking in phone numbers to their cell phones which means they have intent, but may not find the time to contact you.  These leads are highly valuable and by actively going after them you will decrease your cost per call, cost per lead and affect your cost per sale numbers.

In a paid media scenario you can afford to spend as much or as little time vetting the client since you are paying for the media and all the data acquired from the media buy.  This also allows you to highly target your audience which improves the quality of the call, since the ultimate goal is to affect your cost per sale.  It is quite easy to lower your cost per call by targeting a highly responsive audience that doesn’t meet your overall cost per sale goals, nor qualifies for your program.  This is always the lure of going after a lower then market average cost per call scenario.

In order to gauge your existing campaign you should do the following.

Total Media Spend/Raw Calls = Avg cost per raw call

Total Media Spend/Unique Calls = Avg cost per unique call

Total Media Spend/Cost Per Lead = Avg cost per lead (defined by your qualifying questions)

Total Media Spend/number of closed orders = Gross Cost Per Order

The above scenarios do not factor in any of your hard costs/commissions etc.., but will give you a snapshot of how your marketing dollars are performing.   We recommend doing this for each medium used for advertising.  If you are not tracking each media with a unique 800# or URL, determining your actual results per outlet is almost impossible, although at worst you will have a average blended media cost.

To find out more about our pay per call campaigns contact us @ 1-800-947-1142