Cost per inquiry

Cost per inquiry is what you pay in advertising for one inquiry: the ad spend for a period divided by the number of inquiries that advertising brought in. It shows how expensive attention is in each channel before any seller has said a word. It is also the first number in the chain that ends with a customer.

Spend comes from the ad accounts or invoices. Inquiries come from the CRM: the new inquiries in the period whose channel field names that advertising. If the channel field is empty on many inquiries, the number is unreliable, so fill it in on every new one. Ask whoever runs your advertising for spend by channel. One total is no use here.

Use only inquiries that came from the advertising you counted.

Advertising $600 ÷ 40 inquiries from ads = $15.

Check cost per inquiry weekly, by channel, next to the number of inquiries. Whoever runs advertising reads it with the head of sales: a cheap inquiry is worth something only if it turns into a conversation. Keep a rolling month in view as well, since one week of ads can be noisy.

It moves the ad budget, but never on its own. A channel with cheap inquiries and no sales costs more per customer than a channel with expensive inquiries that buy. Example (invented numbers): 40 inquiries at $15 and no sale cost $600 for nothing; 10 inquiries at $40 with one sale cost $400 per customer.

So read it next to conversion from inquiry to sale and next to CAC. CAC adds the work of the sales department and divides by customers instead of inquiries. ROMI then shows whether the channel paid back.

• Counting all inquiries, referrals and repeat customers included. Use only inquiries from the advertising whose spend you counted.
• Taking spend and inquiries from different periods. An invoice paid in March for ads shown in February distorts both numbers. Match the period the ads ran.
• Cutting a channel because its inquiries are expensive. Check what they turn into first: one paying customer can be worth a pile of cheap inquiries.
• Leaving the channel field optional. Without it the CRM cannot tell which advertising an inquiry came from, so make it a required field on every new inquiry.

By Friday, whoever runs advertising puts last month's spend per channel into one table. The head of sales adds the number of inquiries per channel from the CRM, filtered by the channel field. Divide one by the other for each channel. Then check how many inquiries have an empty channel field, and name the person who fills it in from now on. Next week, add conversion to a sale for the same channels in the next column.

Which numbers to check every week, with one definition for the whole team.