Lead Generation and the Part It Plays in Business

Lead generation has been around practically since the beginning of business as we know it. Some businesspeople do their own lead generation, while others pay professional lead generation firms to handle it for them. But one thing is for certain: Lead generation is important for business.

What Is Lead Generation?

Lead generation is simply the generation of interest in a certain product or service, and the acquisition of the interested parties’ contact information. This can be accomplished in many different ways, but that is the essence of it. So why is lead generation such a hot topic lately? Because it is undergoing a lot of changes.

New methods of lead generation came about with the rise of the Internet. And since the Internet is still relatively young, these methods are still being tweaked and experimented with and refined. They’re being combined with other methods. And most importantly, they are working.

Online lead generation has not replaced the other methods of lead generation. Rather, it has enhanced and complemented them. It has given marketers new options and afforded them the luxury of trying new things that their competitors may not have picked up on yet. But we’ll talk more about that later. First, let’s discuss some of the older methods of lead generation.

* Broadcast Advertising – Advertising is one of the most recognizable types of marketing, and it can also be a source of lead generation. It takes on many forms, including but not limited to radio, television, and newspaper ads. Some of these advertisements simply serve to inform the consumer or foster brand recognition. But others are intended to generate leads.

* Direct Mail – Direct mail can take on many forms. Catalogs, advertising postcards, pre-approved credit offers that are found in mailboxes everywhere are examples of direct mail.

* Event Marketing – The most recognizable form of event marketing is the trade show. But the term can mean conducting lead generation at any type of live event.

* Telemarketing – Telemarketing was once a very common method of lead generation. Do Not Call lists have been established in many countries, however, making the conducting of telemarketing campaigns more challenging.

New Aspects of Lead Generation

The Internet has introduced several new aspects of lead generation so far. These include the following:

* Email Marketing – Email has become a very popular form of marketing online. It is extremely cost-effective, and if executed properly, an email campaign can be highly targeted.

* Affiliate Marketing – Affiliate marketing uses third-party webmasters or email marketers to promote products, paying them a commission each time a sale is made. This model is increasingly being used for lead generation as well. Affiliates simply entice consumers to request more information from a company, and are paid a set amount of money for each legitimate lead.

* Social Media – The social nature of Web 2.0 has brought forth a variety of new methods of promotion and lead generation. Companies can set up profiles on social networking sites, promote their websites and blogs using social bookmarking sites, and post viral videos on video sharing sites.

These are just a sampling of the many ways leads can be generated on the Internet. New technology is being developed all the time, bringing forth new ways for businesses to get their messages across and gain the interest of potential customers.

Why Is Lead Generation Important?

Some businesses do not believe that lead generation is important. Others don’t feel that they have time for it. And still others do not believe that it will work for their business.

The truth is that lead generation is one of the best methods of promotion for many businesses. For others, it can complement their current efforts greatly. It takes some work to find the best method for your business, but once you do it could increase your profits greatly.

There are some types of businesses that are particularly well suited to lead generation. Some of these are:

* Insurance Agencies – Insurance agents can offer free quotes as an incentive for prospects to provide their contact information. This is highly effective because most people who are interested in insurance quotes are considering switching insurance companies.

* Colleges – Those who are considering college are often willing to provide contact information to receive information about their major of choice. This provides the opportunity for the institution to market to the individual based upon his area of interest, and to do so repeatedly.

* Software Companies – Those who are selling software or ebooks can capture leads quite effectively online. Internet users are often willing to share their email addresses in exchange for special reports or discounts.

Generating Leads on Your Own

You don’t have to pay someone else to generate leads for you. Many companies do quite well generating their own leads. It takes creativity and persistence, especially when you’re getting started, but you can tweak your efforts until you are getting a good quantity of high-quality leads.

In order to get leads, it helps to give them something in return. After all, few people hand over their contact information out of the kindness of their hearts. By offering something of value, you can generate interest and persuade prospects to give the information necessary to get whatever you are giving. Here are some ideas:

* Quotes – This goes back to the insurance example, but it can also work for other service businesses. Some companies take this a step further and offer quotes from the competition too. That could work for you if you generally have the lowest price, but if not you might want to emphasize your superior service and the value offered for the money instead.

* Information – Giving information in the form of special reports, ebooks, newsletters or audio works nicely for online businesses as well as offline businesses with a web presence. Sending these via email or download keeps costs to a minimum, but offering hard copies as an alternative will appeal to customers who prefer them.

* Free Samples – Product-based businesses can get leads by offering free samples. Budget concerns usually dictate that these be limited in quantity, but this is a great way to get leads and get your products into their hands so that they may try them themselves.

* Discounts – Offering a discount or gift certificate in exchange for opting into your marketing communications may get fewer responses than giving away something more tangible, but it will also result in a higher quality of leads. Those who respond will likely be very interested in purchasing from you, because otherwise they would have no interest in a discount.

Finding the Most Effective Lead Generation Method for Your Business

Each business has its own unique characteristics, so what works in lead generation for one business may not work well at all for another. Finding the right combination of methods and incentives almost always takes some experimentation. But once you get it all figured out, it will be well worth the effort.

Product-based businesses often do well with direct mail and broadcast advertising. These mediums can allow customers to make purchases or request information from the comfort of their homes, or they can motivate them to visit bricks and mortar establishments to see the product themselves. The Internet also provides effective ways to generate leads for many product-based businesses, but it will likely take more experimentation to find the best method.

Service-based businesses often do well with telemarketing and online lead generation. These methods make it quick and easy for customers to get the information they need to make an informed decision. But many service businesses use direct mail and advertising to encourage potential customers to call, visit, or go online to find out more.

Event marketing is usually best suited to business-to-business product and service providers. Trade shows attract professionals, so getting in at the right one can put your business in the midst of a highly targeted audience. Business-to-consumer businesses can also find events that will work for them, but it can be a bit more challenging.

Online Marketing and Squeeze Pages

More and more businesses are finding ways to market effectively online. It is worth looking into because it can be highly cost-effective. You can also reach potential customers regardless of their geographic area.

One of the staples of online marketers is the squeeze page. It is a very simple concept. A squeeze page is a one-page website that a business uses to generate interest and entice readers to provide their contact information to learn more. Utilized properly, a squeeze page is a very effective lead generation tool.

The trick to making a squeeze page is providing useful information, but making the reader provide his email and/or physical address, and possibly even his phone number, to get the rest of the story. There are websites, software programs, and books dedicated to helping marketers make and promote a great squeeze page. You can do it yourself if you have the time and inclination, or you can hire a copywriter and web designer to handle it for you.

Using Affiliates for Lead Generation

Affiliate programs are a great way to generate leads online. You simply market the program to affiliate marketers, provide them with promotional materials to use, and pay them a specified amount for each lead that results from their efforts. You set the price per lead, and you can set forth terms that affiliates must abide by in order to earn commissions.

Software is available that can make managing an affiliate program on your own easy. Most programs automate communications, tracking and payments. Handling the program yourself is the most cost-effective strategy, but it does require some work on your part.

There are also affiliate networks that you can sign up with that will handle almost everything for you, including much of the recruiting of new affiliates. These networks charge fees either by the month or year or by the lead. This option is more expensive than running your own program, but it can also be much more profitable if you run solid campaigns.

Hiring a Lead Generation Firm

If you don’t have the time to do your own lead generation, or you don’t know where to start, hiring a lead generation firm is an option. Campaign costs vary depending on the firm and your requirements, but a good lead generation firm will deliver high-quality leads.

Just as it’s important to find the most effective lead generation methods when you’re doing it on your own, it’s crucial to hire the right lead generation firm for your purposes. Firms often specialize in a certain type of lead generation or certain types of businesses. Looking at as many options as possible and narrowing your choices down to a few that meet your specific needs will result in the best results.

Once you’ve narrowed the field down, get a consultation from each candidate. Discuss how they feel your needs will best be met, and then talk about pricing. It is important to remain within your budget, but it is more important that you get the right kind of leads.

What to Do With Your Leads Once You Have Them

So you have lots of great leads. That’s wonderful! Now what are you going to do with them?

Following up on leads is where the money is made. It’s great if the lead has already made a purchase, but you can make more money by getting him to make more purchases. For leads that haven’t made purchases already, you want to encourage them to make a purchase, or at least hold their interest until they’re ready to buy.

Following up by mail or phone are effective ways to follow up offline. Many companies use both methods to follow up on qualified leads. This works nicely because some people prefer to speak by phone while others would rather respond to a mailing.

While you will probably do nothing but annoy your prospects by making frequent phone calls to them, it’s a good idea to put them on a mailing list. This way you can continue following up with them, making it easy for them to remember you when they are ready to purchase. Due to the expense of mail campaigns, however, you may want to cease contact by mail after a certain amount of time with no purchases.

Email Mailing Lists

One of the most effective ways to follow up on leads online is through an email mailing list. This allows you to touch base with your leads on a regular basis, giving you repeated opportunities to make the sale. There are lots of options for setting up mailing lists, many of which are low-cost or even free.

Some websites offer web-based mailing list services. These are great for beginners because they usually have a small learning curve. The provider handles subscribing and unsubscribing, and all you have to do is provide the messages as you want them sent.

Another option is to purchase mailing list software. This allows you to send the emails through your server or hosting provider. You will have more control this way, but you will also have more to learn.

The most important thing when using a mailing list is to keep your prospects interested so that they remain on your list. Here are some pointers:

* Provide useful information to your prospects. No one wants to read emails that are nothing but one big sales pitch. Giving your readers information that they can use will give them a reason to keep reading while gently encouraging them to buy.

* Don’t bombard your list with tons of emails. Getting several emails per day will cause subscribers to unsubscribe in a hurry. Keep communications to two to three times a week at most. This is enough to keep you in their minds, but not so much that they won’t want you there.

* Make unsubscribing easy. As much as you don’t want your readers to unsubscribe, it is important to make it easy for them to do so if they wish. This not only keeps you compliant with anti-spam legislation, it also fosters trust with the readers who are sticking around.

How Much Are Your Leads Making You?

One of the most important things to consider when analyzing a lead generation program is how much money your leads are making you. It is essential that you make enough money from a lead generation campaign to justify the money spent. A little number crunching can shed some light on things.

The first thing you need to do is determine how many leads it takes, on average, to make a sale. This requires good record keeping, as you’ll need to know precisely how many leads you’ve obtained in a specific campaign and how many sales were generated from those leads only. Then simply turn those numbers into a ratio. For example, if a campaign consists of 100 leads and you made 10 sales, you would divide 100 by 10 to come up with a ratio of 10:1.

You also need to know how much those leads are costing you. This is a little more difficult to figure out when you’re generating your own leads than when you purchase them, but it can be done. If you’re using direct mail, for example, you’ll need to figure in the cost of producing and sending your mailings. For telemarketing, you’ll need to know how much you’re spending in long distance costs and how much you paid your telemarketers if you’re using them. Figure out the cost of the entire campaign, then divide it by the number of leads you obtained to figure out your cost per lead.

Now, multiply the cost per lead by the number of leads it takes to get a sale. Subtract this number from the price of the average purchase, and you have the amount you’re actually making from each sale. If this amount is enough to cover the product’s cost and leave you with a profit, you have an effective lead generation campaign. If not, it’s time to go back to the drawing board.

Roll with the Changes

As evidenced by all of the new techniques brought forth by the Internet, lead generation is not a static concept. It is constantly evolving. So it’s important to keep up with what’s new so that you don’t get left behind.

Some prefer to stick to the tried and true methods that they are accustomed to. If what worked for you 10 years ago is still working for you now, that’s not such a bad strategy. But it is critical to track your campaigns carefully to make sure that they are in fact still working. If you don’t, you might be losing out on sales opportunities without even realizing it.

Even if your old methods are still working just as well as they always have, it pays to try new things like online lead generation to complement them. Online lead generation techniques are popular in part because they are usually less expensive than other methods, but that’s only half of the story. In many cases it is easier to reach your target audience online, and some companies do especially well on the Internet because of the added convenience it offers.

Another great thing about the Internet is the flexibility it offers. Those who prefer not to speak with representatives can still take advantage of the web’s interactivity. And for those who prefer to read up on things before they act, the Internet is a great place to do so. Offering live chat or email assistance allows prospects to ask questions on their terms, when they’re ready.

Lead Generation Is Smart Marketing

There are few businesses that can get absolutely no benefit from lead generation. If you’ve never tried it, there’s no time like the present. With all of the methods that are available today, it may take time to find the one that works best for your business. But you can always hire a lead generation firm or let affiliates do the work for you if you prefer.

If you are persistent enough, you will eventually find a way to get lots of quality leads. If you follow up effectively, sales will follow. And sales, of course, are what make lead generation worthwhile.