Lead Quality vs. Quantity: Keep Your Eyes on the Prize

Chris:
Her eyes on the prize. Now, Miranda Tilly is an experienced account manager at Uzo Media with seven years of digital marketing experience and more than half of that working directly with dozens of beauty schools across the nation. With a background in social media, her clients know her from more of the fun visual projects outside of visual media. Miranda is a dedicated tennis player, and Cat mom. Miranda, welcome.

Miranda:
Hi you guys. Thank you, Chris,

Chris:
Take it away. We’re excited to hear from you.

Miranda:
Okay, perfect. Give me just a sec. Okay, can you guys see my slides? I’m going to assume yes since no one can answer. Okay, perfect. Well, this is my first time speaking at the summit. I’m excited to be here. Also a little nervous, but I am speaking on a topic that feels very relevant to me as an account manager. I feel like it’s something that comes up one way or another very frequently on my client calls. And the big thing I’d say when it comes to lead quality versus quantity is this presentation might feel a little all over the place because I’m not trying to convince you that quality is better or quantity is better. What I’m trying to give you is the context to understand what kind of beauty school you are and how that is going to impact how you understand your report, how you understand your results, and how you interact with not just your marketing team, but your admissions team and make decisions that are meaningful for your school.

(01:39):
Okay, so before we dive in, I like to set the expectation because it does get a little confusing that leads are not enrollments. Leads are people that just filled out a form on the site, and enrollments are obviously people who have enrolled and started school. So every channel from organic Direct PPC, social ads, they all enroll at a slightly different rate. So if we’re talking about Google Ads or PPC somewhere where we’re paying to get in front of eyeballs, we’re going to have a lower enrollment rate. Or if you look at social ads like Facebook, Instagram, TikTok, where people aren’t necessarily even searching for your school, but we’re showing up on their feed or on their for you page, you’re also going to see lower enrollment rates from those platforms. And then when you’re looking at organic or even direct where people are actively searching for your school for information, we’re going to expect stronger enrollment rates from those platforms. So I just wanted to set some context as we talk through leads that not all leads, even high quality or low quality leads are created equally between our various marketing channels.

(02:50):
So let’s talk a little bit about lead volume versus enrollment rates. I’ve got a few examples on the screen right now of three different types of school. One has that a hundred leads, kind of medium volume school, more like metro area, probably with a lower than average enrollment rate of 5%. And then we have an a thousand leads school with, which is like a super high quantity of leads, which a lower enrollment rate of 1% and then that 50 lead school with a 15% enrollment rate. And with these three schools you can see that all of them are doing a healthy amount of enrollments between them. So five enrollments, 10 enrollments, and seven enrollments would be kind of what that breaks down too between those schools. And I’m really, I know a thousand leads is probably a little crazy for a single location school, but I really just wanted to show the extremes of how various percentages can play out.

(03:46):
So are you a high volume lower conversion rate school? Do you get fewer leads but also really high enrollments? The key is to understand this and really try to balance it out and speaking to this a little bit more, I have a client actually that has two locations. One of them is a more metro area and the more competition because it’s in a more metro area. And then I have a suburban area school that’s just not as much population, not as many people to reach. And what’s really interesting is the suburban school is only doing about 30 leads a month, but they have a really high enrollment rate. And then the other school that’s more downtown spends more and gets more than 150 leads a month, but they have a lower enrollment rate. So their class sizes kind of play out to be pretty similar. And that said, both schools are profitable, both are doing well revenue wise, and they both also have different enrollment rates. So it’s just getting a grasp of what does your lead volume look like and does that enrollment rate for you translate to something that is profitable for your school? So even as you as a school benchmark against that 10%, it’s okay if you’re a lot higher or a lot lower if you’re still making money at the end of the day.

(05:06):
So now let’s talk about marketing versus admissions. This is the other part of the recipe that comes into play when we’re looking at lead volume and especially lead quality. In fact, I had a client share a concern recently. Their client that’s part of a broader network and leadership of their network was looking at some of their KPIs. And they were concerned because the school was doing an incredibly high volume of leads. And since they had such a high volume of leads, their tour show rates were lower than what the average was within their network. And their enrollment rates were also not percentages that were indicators of success within the network. And they were also spending quite a bit to get that embryo plates. So when we into it privately with the school, what it came down to was the school was actually growing year over year from a revenue standpoint and a student standpoint, but they had such a high volume of leads.

(06:07):
And of course when you have a thousand plus leads coming in, you can’t get to all of them to get tours, they’re not all going. It’s just like you’re going to have some lower quality leads in there as well, and your tor rate will be lower than average. So I think one of the things we learned that we talked about was KPIs are important, but you have to understand the context behind it. Now, a fair question they asked was, if you know you’re not going to get to all your leads, then is it worth spending the marketing budget to get them? So basically if we reduce the number of leads we have and by extension we’d be reducing our marketing budget, increase those rates on paper and does the actual enrollment outcome change and can we have both high class sizes and lower marketing budget, thus increasing our overall margins.

(06:59):
So on the flip side, what we’re hearing a lot, especially with the current economy that we’re in, is schools that are seeing year over year growth schools are seeing year over year growth, but leads aren’t following through they have in the past. So you might be hearing from your admissions teams or if there’s anyone in admissions tuning into the summit today, you’re probably thinking we’re definitely seeing more lower quality leads. And yeah, sometimes that’s fair for sure. Sometimes I think there’s the other side of it, but definitely right now what we’re seeing with the economy is that it’s definitely a tough market out there right now. And breaking it down there definitely is a natural tension between marketing and admissions. There are two teams that kind of have a little bit of a pull and I think I have some trends that I’ll show you coming up here in a few slides that will show you that you’re doing a good job. We’re really living in a market that is very changing and we’re also seeing a difference in marketing outcomes that we’re providing for our schools as well. So we’re seeing a lot of change happening this year.

(08:17):
Okay, so go ahead and look at this timeline that I have here. I’ve gone back to 2015, so we’ll start there. So back in 2015 we had a lot of schools splitting their budget pretty evenly between the two flagship programs of a lot of schools, which is cosmetology and aesthetics and with some of the budget going to top of brand or some of their smaller programs. And that’s the way it was for a really long time. And demand for those programs was fairly similar. And as we progressed into 2019, we saw that skincare got really hot. We call it the aesthetics boom and wait list started coming up. And I’m sure a lot of you are thinking like, yep, we’ve had wait lists for our aesthetics programs in the past. Some of you still might have wait lists right now. I know I’ve had clients who like last year had wait lists that were a year out for their aesthetics programs and people started shifting budget away from aesthetics more and more and pushing it toward cosmetology programs.

(09:24):
And what that did was a couple of things. So one cosmetology just wasn’t as popular, so those leads got really expensive. And two, because everyone was moving their budget over to cosmetology, it also got more competitive. So we have a lot of people who have their budgets really heavy on the Cosmo side and really not doing a lot outside of organic for aesthetics. And we really just ran that skincare high through the pandemic era. Now we’re seeing a bit of a shift. I have schools asking me more and more recently what’s going on with my aesthetics leads as we’re looking at monthly reports. And I’ll show you in a few slides, a couple of reports for us to look up. We’re seeing a decline in aesthetics leads and cosmetology leads are back on the rise for 2025, but not any more than aesthetics is down.

(10:23):
So our lead numbers for a lot of schools who have changed nothing to their budget year over year are actually seeing year over year declines. That said, revenue isn’t terrible because I do think it helps that cosmetology is still doing steady and it is a higher cost program. And so that does help, but it is getting harder and harder to enroll students and it’s kind of creating this artificial look that lead quantity is going down and maybe even lead quality and we’re having to spend more So our cost per leads are going up and we’re really seeing that across the board.

(11:04):
So if you look here at this Google Trends data slide, you can see that we have kind of an interesting thing playing out. So I’ll call your attention to the blue line first. And we can see that aesthetics is relatively flat. We actually have a handful of clients who have shifted budget back into the aesthetics PPC campaigns toward the end of last year and this year as their aesthetics fleets have leveled off quite a bit organically. One client I have, and I don’t have the data to back this up so it’s more anecdotal, yeah, I can’t say that word, but I tried. What I’m hearing is in my market from students is just no jobs. Everybody I know is an esthetician. It’s so popular, there’s just more licenses than jobs available in the area. And we’re really seeing this play out as schools are scaling back, maybe not as much in the medical or advanced aesthetics area, but in the base program for sure. And if we look back at this, what’s good is cosmetology is at the highest it’s been in the past five years. And for anyone who’s not in the marketing game running ads, capitalizing on this demand now is a good time to backfill any drop in aesthetics leads with cosmetology leads for sure.

(12:24):
And again, when we talk about lead quality versus lead quantity, we’re starting to hear more and more chatter from admissions. The quality is going down. And what we found when we dove in is that these are still good leads in the sense that they are real people in the market looking to go to school, but people are really pinching pennies and just not willing to commit right now. And I think that non-committal is probably a more accurate thing to say than low quality. So we can talk a little bit more about how to address that here in a second. So I mentioned I’d have a few reports to show you guys. This is an example of a report that we put together for our clients here at uel. And I think this one really builds on what I’ve been saying so far. So right out of the gate you can see the leads are down year over year, even though we’ve spent close to a thousand more, which isn’t a crazy percent increase to spend year over year, I’ll add.

(13:26):
And what’s interesting is like I said, we’re seeing that 15% lift in cosmetology, which is good. And then we are seeing a 35 dip in aesthetics for this specific client report, which aesthetics has been in the past, as we all know, has been a very high quantity lead program. And that drop of the semi 30 leads is still enough to give us a net decline overall. And we were able to make up for this net drop a little bit with Google ads for this specific client. Most of that dip we can see came in the green section for organic. But again, I think a lot of clients listening in know they are definitely having to spend more year over year to keep their leads steady.

(14:16):
And you can see this is true, we’re definitely not at an all time high by any means for cost per leads. And the cost per leads that I have listed here are specifically for PPC cost per leads definitely during the pandemic leads. Were very expensive leading up to it. We’ve come down from those pandemic years. But if we look recently, we are seeing year over year increase in the cost per lead. And when we look at how people, where our leads are coming from, we can see that organic as expected is still at the highest at 65%.

(14:56):
About a third of the leads are coming from PPC. And then social typically as we know, isn’t a main driver of leads, but we know that rising tides lift all boats and we definitely expect to see an increase in PPC and organic when we are running social. So this is kind of the breakdown that we’re seeing currently. And yeah, I also just wanted to point out this whole presentation is speaking to averages. We definitely have schools that break away from these overall averages, but this is kind of the, what we’re seeing across the board. So here is another real client report. You can see that spend is definitely a little higher. This client leans heavily into PPC spend. And as you can see here, we spent about 1600 year over year, which again isn’t a crazy percent to spend as an increase year over year, but we are seeing a decrease in PPC leads while organic actually in this case stayed pretty steady or went up a little bit.

(15:54):
But that increase in spend did not yield a higher increase in leads overall. So I just don’t want to paint a picture that organic is the only thing that’s down and PPC is going to be the thing that saves you. You can see across all marketing spend, this client in particular had a pretty big increase overall in their cost per lead. And clients that are spending this amount monthly are usually in a much more competitive area. And that’s where we’re seeing some of the hardest, most expensive lifts because everybody is spending more and that leads to the market tightening up.

(16:33):
Okay, so are your leads counted correctly? This is an interesting thing to talk about because we actually recently had a client who left. They were a longtime client and they left us to go to another agency and they ended up coming back to us afterward. And we got ourselves in a bit of hot water with them right out of the gate because two things happened. One lead quality was different and we’ll talk about how in a second. And then two, they were upset with us about lead quantity and what we were reporting on. And when it came down to it, the previous agency was reporting in a slightly different way than we were. So what we do here at uel is we dedupe every lead. We make sure we’re not counting the same lead more than once we report on real names. We don’t want to report on pixel fires.

(17:21):
I know Dave mentioned earlier before my presentation that our reports at UEL for PPC specifically and social ads actually under report on leads because we only count last click attribution. So yeah, we know the internet doesn’t happen in a vacuum. We do our best to report as cleanly as we can, but people can be influenced or click on an ad and not convert or fill out a form right away and come back through organic or come back through another way and convert. And we know that the PPC ads played a part in their journey, but might’ve not always been the last click. So if anything, our reports under report for some of those platforms. And then lastly, we try to get as close to your CRM as possible. So we aim to be within 5% of your CRM reporting for our reporting, but we like to say if you’re within 15%, it’s definitely not a bad place to be.

(18:18):
So in this case, schools are reporting different, or in this case for the school, we were reporting differently probably under reporting compared to the previous agency. And the other thing that was interesting when we dove in was our enrollment rate for these leads was actually much higher than previously. So we were counting fewer leads or lower quantity, but higher quality leads. And we all higher quality leads, especially our admissions team, we don’t like to waste our time chasing down lower quality leads if we can help it. And then I just wanted to add that with the school specifically, nothing had changed in their admissions team. Just to kind of tie in the tug of war between admissions and marketing from earlier. I know I’m running up close on time, so I’m going to have a few more minutes. But again, to bring up marketing alone isn’t enough. I don’t think that there’s ever been a more important time than now to make sure that you have your admissions processes tightened up.

(19:13):
And something else that we can do that we like to do for our clients are these ROAS reports or return on ad spend. I want to point out on this report specifically, something that’s interesting that kind of speaks to lead quantity is if you look at the prior year, they had lower leads than they had in the current year, but their enrollments were higher. And I just think this is really kind of paints a picture of how important it’s that more leads doesn’t always equal more enrollments. So again, if there’s anyone who’s interested, current clients are not for us to look at this, this is something that we can definitely do for you. And I just wanted to round it all out that it’s not just about more leads, it’s about better leads. We want to make sure our leads are turning into enrollments and your enrollments are turning into revenue. And lastly, focusing on what matters. Any metric aside from revenue can turn into a vanity metric that includes leads, show rates, cost per leads, any of those things. So it’s very important to just make sure that we’re focused on the end goal of enrollments revenue and how we can make sure that we’re doing that. So if anyone would like us to do an analysis of your leads or your lead quality, we’d also be happy to look into that. And thanks for your time today,

Chris:
Miranda. Thank you so much. A lot of awesome information showing the straight numbers. It’s, the deal is it’s more expensive today, but I think focusing on the right lead and where that’s coming from, knowing the lead sources that drive the higher quality lead is important. So a lot of good stuff. Everybody put in the chat. Thumbs up for Miranda for the information that she shared. Okay.