Opening doors is what lead generation is all about. A lead is a positive response from a potential buyer about a product or service offered in an offline or online ad, a phone call or a direct mailing to a prospect.
- Leads can be generated by Facebook ads, Google Ads, email shots, direct mail, radio, TV or magazine ads etc. to acquire new prospects and put them in your database and then work them.
- Leads can also be generated from within your current customers database by directly contacting with your customers by email, direct mail, phone, SMS, package inserts or individually-targetable media like Facebook ads (by uploading a list of email addresses or phone numbers to Facebook’s ad platform) or via retargeting pixels (e.g. with Google Ads).
This blog post is about #2 or generating leads from within your current customers database to successfully sell higher-priced products and services.
Leads can be produced to help salespeople open doors and to provide a preliminary introduction. These work much better than having salespeople make random calls to your database or flooding your database with straight sell offers that don’t convert.
With the average cost for a sales call over $200, prequalified appointments become even more important.
You can use lead generation to qualify persons as having a specific interest in a product or service. Then you close the sale with a second (or third, fourth etc.) targeted ad, mailing, phone call or visit to the qualified lead.
Leadgen May Be More Productive Than a Straight Sell of a High-Priced Offer
Your choice of possible performance marketing methods is contingent in large measure on the type of business you have or represent.
An important consideration is the quality of the leads received. Quality here means the percentage of leads that can be converted into sales.
As a rule, the more time and energy your lead has to exert, the better chance there is it will convert to a buyer. But then, the more effort required on the user’s part to become a lead, the lower the chance he or she will become one. So a lot of testing here is in order.
Frequently, short lead forms requiring nothing but an email address, Facebook login or requiring nothing at all (after all you already have it all in your database) produce a significant quantity of nonbuyers.
This is why you could use long forms with open-ended questions, quizzes etc. This practice qualifies the lead by selecting persons willing to invest a few minutes to get the information offered.
To a considerable degree, the number of leads received can be greatly affected by the copy and lead offer. The kind of product being sold often determines how much information should be included.
For example, when generating leads for a travel offer, a long form landing page may work better than a short one. If you are selling training courses, a short landing page will likely produce more leads.
Ultimately, the price you can pay for a lead is contingent on the percentage of the leads that can be converted to actual sales and the profit margin resulting from such sales.
For a new lead generation program, you will have to make estimates, then test and faithfully record results to derive a more accurate idea of how much you can spend per lead.
Lead-generating Programs Require at Least a Two-Step Funnel
One of the big advantages lead-generating programs offer is prequalified leads and overall reduction in sales cost.
- The first step is to qualify the recipient as a legitimate prospect for your high-priced product or service.
- The second step is to sell that prospect the product or service.
Remember, when writing lead-generation copy you are working within the framework of a two-step program. The first step is to create sufficient interest in the product to motivate the reader to respond. The second step sells the prospect on the product offered and persuades the recipient to send his or her order.
Writing successful lead-generation copy requires as much skill and knowledge of the market and product as does writing a landing page or sales script that sells the product and closes the sale.
It also requires a writer who understands people and what motivates them to take action:
- Don’t foreclose your opportunity of getting a lead by telling the prospect too much.
- Let the follow-up (second step) do the selling and closing.
Crafting Lead-Generating Copy
In most instances, a simple, inexpensive lead-producing mail package, landing page or email is recommended. It should be benefit-oriented, communicate the value proposition clearly, and convey a strong sense of urgency to respond promptly.
Another point to remember is that lead-generation copy can be written to produce large quantities of less-qualified leads or very few but highly qualified leads.
There are some advocates that insist that the more leads you get, the more you sell. Others contend that seeking out a few highly qualified leads is the most desirable method.
Which direction to go should be based not on individual marketing decisions or opinions but on a properly conducted marketing test.
Case in Point
Let’s imagine your high-ticket product is a B2B general management training via online classes. Here’s a supersimple (if not oversimplified) scenario in which you test:
Version A: a “soft” leadgen offer in which you’re giving away a free paper book on team development for first-time managers, your copy is heavy on promises, there is a free physical gift included (e.g. a mug), and the offer is blind, i.e. the recipient doesn’t know you’d like to sell him a $500.00 training on general management.
Version B: a “hard” leadgen offer in which you’re offering a free online self-assessment diagnostic quiz for first-time managers you’ve got prepared some months back for other purposes, and the offer is not blind, i.e. the recipients gets informed that he or she will get access to a free webinar on company’s brand-new MBA-equivalent training program conducted online.
Let’s imagine again that:
- your test is conducted only via emails to your current customers database,
- each and every lead is phoned via telemarketing sales force; it costs $10.00 each,
- other costs are shown in the table below.
And here are imaginary results of this test:
|Soft Offer||Hard Offer|
|Total emails sent:||100,000||100,000|
|Total leads generated:||1,000||200|
|Lead processing cost:||$10.00||$10.00|
|Total lead processing cost:||$10,000.00||$2,000.00|
|Lead fulfillment cost:||$10.00||$0.00|
|Total lead fulfillment cost:||$10,000.00||$0.00|
|Order fulfillment cost:||$40.00||$40.00|
|Total order fulfillment cost:||$4,000.00||$4,000.00|
|Revenue per order:||$500.00||$500.00|
The hard offer clearly got beaten when it comes number of leads generated. Five times more leads looks great.
But due to soft offer’s poor lead qualification (i.e. recipients were eager to convert to a lead but not interested in spending money) the conversion ratio from leads to orders was spectacularly low.
Although both offers generated the same number of orders, the soft offer, due to costs incurred, is a clear loser in this imaginary scenario.
So: no room for opinions there. Hard offer in the scenario above is the only one that should be rolled out.
Some companies offer a low-cost, high-volume item out of their product line and sell it with the leadgen offer (some call it a “trip wire”). Some use this technique to build highly qualified leads with expressed buying intent for their future campaigns.
If the high-ticket product or service is being sold by mail or phone, the reason for using a two-step program is to reduce total mail or telemarketing cost.
This is particularly true if it is necessary to mail an expensive package of four-color literature or close the prospect by a telemarketer.
The lead ad or landing page is your vehicle to screen out unqualified prospects and to choose those most likely to make the desired purchase.
But it doesn’t mean that your lead generation offers have to be the “hard” ones only.
What Type of Free Gift Works Best
Generally a free gift of merchandise will work better than a free ebook, a free checklist, a free webinar, a free online diagnostic tool, or even a free printed book.
Much has been written about always choosing an item that is related to the type of business being conducted. But this might be not your only option. Always test your free gifts.
One company, doing B2B leadgen among top managers, used a… boxing glove (just one). Over a period of 3 years many different items were tested. Nothing ever worked as well as the boxing glove. The promotion worked so well that the gloves were purchased by the car load.
Another company in the same business successfully used an inexpensive train model in small scale.
It’s always appropriate to choose items known to be of interest to the audience being addressed but then it’s always good to test some non-intuitive items.
To some considerable degree the choice of an item is contingent on how the item is going to be delivered to the prospect. If the item is going to be sent by mail, by all means choose something that is light.
You can easily spend more on postage and packaging than on the item being offered. If the item is going to be delivered by a salesperson, the weight is less of a problem.
- When writing lead-generation pieces, don’t “spill your guts”. Tell only enough to qualify the lead and get a response.
- Copy can qualify the lead and improve the quality of the respondent.
- Gifts make great door openers.
- Select gift items your audience craves.