Any business owner or sales person can tell you that: NO new leads = NO new business. Without sales, you don't exist.
Lead Generation is tough for any business, especially when they have little experience or time to execute a proper strategy. Advertising is questionable, cold calling doesn't work and the only certainty is a business needs new leads to survive and grow.
Unfortunately, since most new businesses have little experience in generating new leads, they make the mistake of signing up for online service directories or buying space in one of those coupon publications in hopes that it will help in generating leads. Sadly, only after spending their money on these services, will they realize how poor the quality and consistency of these supposed "leads" are.
Yes, you've probably heard of online directories such as Angies List and Home Advisor and offline direct mail directories like Coupon Clipper. As if it isn't annoying enough to see this magazine of coupons in your mailbox every month, it's even more annoying to see local businesses throwing their money away to advertise in it.
Many business owners sign up for these online lead generation directories and/or advertise in that periodical because, let's face it, they just don't know what else to do. They get the double-talk by a salesman or convince themselves (because they see other businesses doing it - it must work) that these directories/publications will actually work and bring leads, new customers and more business. Any business that registers with one of these services does not understand what a lead is truly worth to them. Yet, despite not knowing, they make the choice to throw their money away anyway.
You see, not all leads are created equal, in value or worth: High-quality-exclusive-leads that convert into a sales is a lot different from high-volume-low-quality-leads that do not convert into sales.
Online directories: Welcome to the race to the bottom.
What are they: Sites (like the ones mentioned above) are directories which connects its members with service professionals listed on the site. Essentially these sites are just research companies that charge businesses big money to get listed. However, they're saving the consumer's time and energy by doing the research and compiling the list.
Cost: Though many of these directories are free to sign up, they are not free to get your business listed. This means, in order to get on the list, stay on the list and appear higher in the list, you'll have to pay. Monthly costs will soar as you try to keep your business on top of the list as other businesses join, drop out and decide to pay more. These sites are known as pay-to-stay models: if you don't pay, your leads obviously go to someone else who is paying more to sit at the top of the page. Since most consumers will only check the first page of that search result (maybe the second), your business needs to be on top or else you won't be seen. How do you get on top? Pay more than everyone else. Oh, and if you signed up for a free account, that's great, but get ready to get harassed by their sales people constant calling to upsell you.
Leads: They claim the leads you get are exclusive. How can they be exclusive if other people are getting the same leads? Since multiple businesses or service providers are listed together, the leads are not exclusive. The same lead goes out to many different businesses even though you're paying for that "exclusive" lead. This means you have to be first to call to get the business or else those other seven businesses (that just got the same lead) are going to call. These sites do not go out of their way to sell the value of your company...every business is the same to them.
The Consumer: consumers can go on these sites and give personal reviews of the business/service if they used it. In fact, one of these directories claims its whole business model is based on this. Meaning the more and better reviews you have, the higher you get listed on the site. However, because a business can always pay more to get a higher listing, the results are skewed. Many of these sites also claim each business listed has passed a thorough background check. That's is great news for the consumer, if it is true. It's not like the consumer is really going to be able to check on that. Consumers who shop on these sites are renowned price shoppers - they only want the lowest price. Sure they say they're interested in quality but more times than not they base their decision on the lowest price. You can't run a business constantly competing on price. Your goal is to make a profit, not do work for free. Just "Google" the reviews for any of these sites and you'll find more negative reviews than good.
The coupon magazines. For some reason the same coupon magazines keeps arriving in our mailbox every month (from there it goes right into the recycle bin). This periodical is one of the riskiest ways to spend money, indiscriminately advertising in hopes that you will hit a cheapskate. Why on earth would any business use a publication like this to get business? Because of copy-cat syndrome - they see their competitor advertising in it and they think it must work. The consumer's that are cutting coupons out of this periodical are not your ideal customer. They're strictly about price, discounts and finding the right deal. As we mentioned above, you can't run a business competing on price alone. Consumers (the ones who don't use this periodical) are smart enough to know that when a business offers a coupon, it's only being added to the full price anyway, meaning there really is no discount. Though it varies greatly, this publication has a reputation for being very expensive as well. Dropping $300 - $2500 a month (depending on ad placement and size) for 6-12 months (plus an initial fee) may or may not be a lot to some business owners, but considering the ROI on it, the costs are crippling. The only decision that has to be made about this periodical is this: who do you feel more sorry for? The mailman that has to deliver these things or the business owners who throw their money away on it. Over the past four years we've spoken with countless local business owners that have put their money and trust into this type of publication and the emotion was the same from all of them, frustration and anger. They got absolutely nothing out of it. Plus, half went on to say they only look at these periodicals to see what other businesses might be a good fit to sell their services to.
So what is a business owner to do? If you're spending money on any of the above methods, step back and consider the following four points of when it comes to your lead generation strategy. After doing so, you should clearly see how investing in your own custom marketing campaigns will be in your best long term interest as a company as opposed to getting minimal-short-term gains with the methods above.
- The Amount of Leads - Does this source provide a sufficient number of leads? One lead a month that you close is good but 100+ leads a month would be better (even if you don't close all of them).
- The Consistency of Leads - Does this source provide a predictable and reliable flow of new leads. Every day, every week, every month, this source should be providing you with new leads.
- The Quality of Leads - What percentage of the leads turn into actual business? Or do these leads rarely turn into business. Are the leads exclusive to you? A lead should be going to you and you alone - it should never be shared with your competitor.
- The Cost Effectiveness of Leads - Does this lead source provide a profitable ROI? How much do you spend per lead and how much profit do you make from that lead. Making a profit is the end goal - not working for free.
A better long-term investment when it comes to online lead generation.
Doing marketing right, building relationships and creating love for your company requires some work, but that's what will set you apart from your competitors. If you're all in with your business you should have a lead generation website, plus be doing some PPC, videos, email campaigns, SEO, producing content and more. What's more you should be using lead tracking software to measure what's working and what is not. Now, all of that sounds like a lot and it is. It's enough work to make a full time employee's head spin. However, you don't have to go at it alone. Hiring a marketing company to do online lead generation is an investment you can't afford not to make - especially when it comes to the success of your business and the long-term disastrous cost of not properly generating leads for your business.
How good are your leads? Below are some more lead generation tips to review to consider if your lead generation strategy is working for you.
Do you get exclusive leads? Every business should have their very own "exclusive" leads. Only you should be receiving that lead, not any other business and certainly not your competitor. If another businesses or competitor is getting the same lead as you, that's a huge problem. You're competing when you don't have to.
Cost per lead. Sure spending as little money as you can per lead sounds tempting but it's often a mistake going for the cheapest lead, it's also about converting that lead. For example: With an online directory (like mentioned above) you might only pay $20 per lead, but if the close rate on that lead is only 5% that's not going to sustain you. If you're doing your own campaign (maybe some SEO, video or PPC) where the conversion rate might exceed 50%, you should be glad with paying $125 per lead. Your cost per lead would be $400 (for the $20 lead) vs. $250 (for the $125 lead). In this scenario the $125 per lead is cheaper and you get more lasting equity out of it to boot, because you've invested in your own SEO and PPC, which will continue to deliver.
Consistent leads. You can't run a business on one lead a month. It's no surprise you need consistent leads to survive, so your source should be providing you with new leads over and over again. Having a source that can provide you 100's of leads a month will sustain your business well into the future. Building out your own marketing strategy helps achieve this over time - you're building assets that live in the marketplace forever, not throwing money at one-time advertising attempts.
Quality of leads. We touched on this above but here's another example. If you're paying $10 a lead but only converting 1 out of 10 that equals $100 per customer. Now if you're paying $40 a lead but convert 90% of the time, that's better. Though the lead is more expensive, you're more likely going to convert that lead into a customer, which means profit. That's a quality lead because you're more likely to close it. You're more likely to close it because they found you exclusively and not your competitor. That's a benefit of doing your own marketing, beating your competition.
Concentration of leads. Often overlooked and it depends on what industry or service you're in but very important when it comes to the service industry that needs to do estimates. If the leads are not concentrated in one geographic area, that means you or your sales guy is driving around. What's that costing you in time, gas and efficiency? If you have to drive a 1/2 hour to each appointment, you're missing out on a lot of appointments, wasting time and gas. Instead, cut that drive down to 5 minutes and you're delivering many more estimates plus saving money. Having a custom marketing campaign can deliver you appointments/leads in one concentrated geographic area at a time.
Scalability. You might be in a business where you experience slow months due to things out of your control like the weather. For instance, the winter months can be slow for tree companies in the northern part of the U.S.... it's nothing they do, it's just nature, it's cold and it's probably snowing somewhere. Obviously in these slow months you'll want to scale back your marketing spend - people just aren't thinking about cutting their trees down in winter. Come spring, summer and fall, you'll want to ramp your marketing up again. Having your custom marketing campaigns allow you to do this. The sites/periodicals mentioned above will lock you in for 6-12 months, which means you're locked into spending the same every month, regardless if you get any leads.
The choice is yours, be wise in your lead generation efforts. Don't drive two hours a day to build a $25,000 house for a cheapskate when you could walk next door and build a $500,000 home for your neighbor. Translation: quality leads count.
As a business owner, you're pressed for time every single day. Trying to execute a marketing strategy to generate leads is just another thing you don't need on your plate. That's why you should turn to a team that provides lead generation services and can help you achieve your goals. Because, as you read, it's not about the cheapest price, it's about the quality of the lead and the profit you make.