Short answer: yes it is, but not in the way most people think.
When people say that their marketing is a numbers game, what they usually mean is that they just need to generate as many leads as they can, so they can sell as much as they can.
While lead generation is obviously an important part of marketing, it’s not the only important number to be concerned about.
Because it assumes that your conversion rates are set in stone. If you can’t change your conversion rates then, yes, the only way to grow your business is to generate more leads.
However, for the vast majority of businesses, there is much to be gained from working on improving your conversion rate
Why is conversion rate important?
Lead generation is the expensive part of marketing and it roughly correlates that the more you spend, the more leads you’ll get. Not always, of course, but - in general - if you want more leads, you’ll probably have to spend more on marketing. Digital advertising is directly correlated since you literally pay per click.
Let’s make things easy. Let’s say, your business currently gets 20 leads per month and those leads turn into 5 new clients. If you want to double your business, you have two options:
Since a lot of the work that increases conversion rates involves improving processes and creating evergreen content, templates and resources, it only needs to be done once, and then all your marketing leads will benefit from it.
In short, option 1 will mean you have to spend twice as much forever while option 2 will cost you a one-off investment to increase the conversion rate and then you'll only spend what you used to spend.
So do you want to spend twice as much on marketing every month, or do you want to invest in your marketing once and then spend the same amount but get twice the return?
The problem with focusing only on lead generation
I’ve simplified things a lot to explain my point. The other problem with only increasing lead generation without watching the conversion rates, is that a lot of marketing is not actually as scalable as it looks. People often double their advertising spend but don’t get twice as many leads.
What should I measure?
Most of my clients measure a number of different conversion rates:
These numbers will tell you where you’re losing customers and, therefore, where you need to improve your marketing and sales processes.
Don't make this mistake
People make the mistake of thinking that “marketing is a numbers game” and so that means they need to get more followers, or they have to send out more emails, or they must spend more on advertising. They want to see graphs of marketing activity going up because that makes them feel like things must be going well.
But that’s not the only way to grow a business. And if you’re not looking at your conversion rates then you can waste a lot of money.
Anyone with a little marketing experience can spend lots of your money generating more leads. But if you’re not looking at the other, more important numbers in your business, then you’ll never be as profitable as you can be.
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