How to Calculate Cost Per Opportunity

Quoted on this wiki

Every place a page here uses this source, in the order the words come in it.

1. My marketing professor once said, The answer to every marketing question is, "It depends." Thus, the important part is knowing on what. “When people ask about cost/opportunity, they usually have one of two things in mind:” An efficiency question -- e.g., how efficiently does marketing spend convert into sales opportunities (oppties)?

   In Cost per opportunity

2. So, how do you calculate the cost/opportunity? Well, it depends! On what? On the specific question you're trying to answer. When people ask about cost/opportunity, they usually have one of two things in mind: “An efficiency question -- e.g., how efficiently does marketing spend convert into sales opportunities (oppties)?” A cost question -- e.g., how much it would cost to get 50 more oppties if we needed them

   In Cost per opportunity

3. An efficiency question -- e.g., how efficiently does marketing spend convert into sales opportunities (oppties)? “A cost question -- e.g., how much it would cost to get 50 more oppties if we needed them” Knowing which question you're being asked has a big impact on how to calculate the answer. Let's illustrate this by looking at this typical marketing budget, which is allocated roughly 45/45/10 across people, programs, and technology:

   In Cost per opportunity

4. A cost question -- e.g., how much it would cost to get 50 more oppties if we needed them “Knowing which question you're being asked has a big impact on how to calculate the answer.” If this marketing team generated 1,000 oppties, then the average total marketing cost/oppty is $9,000 = $9M/1K oppties. You might argue that's a good overall marketing efficiency metric and try to benchmark it. But those benchmarks will be hard to find.

   In Cost per opportunity

5. A cost question -- e.g., how much it would cost to get 50 more oppties if we needed them “which is allocated roughly 45/45/10 across people, programs, and technology:” If this marketing team generated 1,000 oppties, then the average total marketing cost/oppty is $9,000 = $9M/1K oppties. You might argue that's a good overall marketing efficiency metric and try to benchmark it. But those benchmarks will be hard to find.

   In Cost per opportunity

6. A cost question -- e.g., how much it would cost to get 50 more oppties if we needed them “which is allocated roughly 45/45/10 across people, programs, and technology:” If this marketing team generated 1,000 oppties, then the average total marketing cost/oppty is $9,000 = $9M/1K oppties. You might argue that's a good overall marketing efficiency metric and try to benchmark it. But those benchmarks will be hard to find.

   In Outbound budget

Quotes are verbatim and belong to their publishers. Where a quote has been translated, the original wording is kept below it.