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How To Create A Flow of High Quality Leads

by 8020 Center Business Owner

Introduction

Near where I live, and probably near where you live also, is a big river.

In my case, the river is the Noosa River and it flows out from the hinterland and into the sea every second of every day regardless of the season and regardless of climate variations.

In fact, the Noosa River has never stopped flowing in known history, including during periods of severe drought, of which there have been many.

Imagine this: our most recent drought lasted seven years, during which what little grass existed was dry, brown and brittle. Water restrictions were at their highest level in history and yet during the whole seven years the Noosa River continued to flow into the sea, albeit with lower flow levels.

If you had travelled into the catchment areas of the Noosa River during that time you’d have discovered some creeks had dried up and others were just a trickle. So how did so little water at the source turn into so much at the mouth of the river?

The answer is simple: the Noosa River relies on more than a hundred sources for its flow of water. In addition to a multitude of visible creeks, streams and lakes, there are their underground counterparts, as well as the many hills and mountains, all collecting a drop of dew here and a drop of rain there.

Unfathomable though it may be, every single drop of water, collected in every remote and inaccessible part of the Noosa River’s catchment area contributes to the water constantly flowing into the sea near Noosa Heads. Similarly, your business needs a multitude of lead generation sources and a variety of mediums in order to create a secure and steady flow of new business, regardless of the business climate.

Many of the businesses, both large and small, that died during the recent Global Financial Crisis, were businesses that took the good times for granted and that failed to aggressively invest resources into continually developing a diverse source of high quality leads.

Trickle Marketing

And that’s the reason I created the term “Trickle Marketing”: to get organizations focused on the need to establish of lot of lead sources. A Trickle Marketer understands the following key principles:

A lot of steady trickles is a better than a one-off flood

Forgive me for mixing my metaphors here but in fishing terms most people are out there trying to land a whale … and without the boat to do it. The marketing equivalent to landing a whale is a large Joint Venture campaign with another organization that has a massive number of high quality prospects that you market to, jointly. By all means chase a whale but make sure you’ve got your nets out to catch plenty of normal sized fish in the meantime.

Getting back to the trickle metaphor, if I had to choose, give me a thousand steady trickles over a one off flood anytime.

Lead sources that yield 1 or 2 new clients every now and then are worthwhile

Following on from point one above, don’t be discouraged that a lead generation source only produces a new client every once in a while. You never know where that one new client will lead you. More specifically, you can’t tell who they will lead you to: new clients via referrals, large JV opportunities and more.

Few would argue that every single new client should be respected and treasured. And the same applies to every single new client source.

A new subscriber is like another drop in the flow of water upstream

Every time someone chooses to “like” you on Facebook, follow you on Twitter, invite you to connect on LinkedIn or joins your Google+ circle, it’s another drop of water that splashes into one of your feeder streams. If you can connect with them and either add value and/or get an offer noticed, then they count. No follower of subscriber doesn’t matter. Everyone counts.

To mix my metaphors again, every time I see a new subscriber joining our database I think of it like another fish being added to a big pond and then being nourished until I am ready to go fishing. (Note: every analogy has its limits … no “fish” die in my marketing, I practice “catch and release”!)

A prospect that does not buy immediately can be recycled continually until ready

Business owners that fail to keep the relationship with a prospect alive after they have declined to buy, are “leaving money on the table” so to speak.

A prospect that considered purchasing and chose not to, by my estimate is four times more likely to buy in the future than a new prospect, provided you keep the relationship alive by nurturing it.

Prospects can be nurtured via an engaging (key word!) newsletter, ezine, blog, meeting and so on. The bait you offer should match the fish you are wanting to catch (don’t send a video that changes scene every half a second if you are targeting the over 70s market!)

Major Lead Generation Mistakes That Most Business Owners Make

A failure to do any marketing

It’s one of the most curious phenomena on the planet: business owners who get stressed and complain about not having enough clients who also fail to do little, if any marketing. What marketing is undertaken by most business owners tends to be a random, ad-hoc response to a minus sign appearing before the balance of their bank account: too little, too late.

Visit any business that’s been thriving for a number of years and you’ll find that marketing is a daily event that continues regardless of the economic well-being of that business.

If you have a small business and the marketing is dependent on you then I’d recommend the following.

Put aside one day per week exclusively for marketing activity. Do not tell me you cannot do this. That would be a lie. You may not want to do this but that’s not the same as an inability.

If you have a larger business then ensure that you have at least the one full time equivalent team member doing nothing but marketing including reporting to you every single week on progress towards an agreed set of Key Performance Indicators.

Either way, the bottom line is this: In order to create a prosperous and secure future you must commit as many resources as possible into the continual and never ending development of new lead generation and conversion systems and the continual refinement of the same.

A failure to make this commitment is the biggest single, most often repeated, mistake of small business owners the world over. The world will not beat a path to your door simply because you have a good, or even a great, product. It’s the marketing that makes the difference.

A failure to make marketing an in-house responsibility

If I had a dollar for every time I’ve heard a business owner say “I love what I do and I love working with my clients, I just need to find someone who can do the marketing” then I would spend the extra money upgrading to first class on my trip to Germany this Christmas.

Getting someone else to do your marketing will never happen, and here’s why: the person who you can afford to hire can’t do your marketing and the person who can do your marketing, you can’t afford to hire.

What it comes down to is this: if you are a very small business then YOU must do the marketing. If you are a little larger then someone in your organization can do the marketing. Either way the responsibility for marketing MUST remain in-house.

Please note: that’s not to say that you can’t outsource parts of your marketing. For example a great Public Relations agent can be worth their weight in gold and an SEO expert sourced via websites such as www.elance.com and www.odesk.com can also be worthwhile.

But the orchestration of these contractors and the measurement of their results and the holding them to account are all functions that need to be kept in-house.

The reason is simple: new leads are the life blood of your business. To hand responsibility of such a vital function to anyone outside of your business is to place the security of your family and your business in their hands. Delegate parts of your marketing but never, ever abdicate them.

A failure to discern that source of lead is critical

Not all sources of leads are created equal. Just as some streams have better quality water than others, so too do some lead sources produce higher quality leads.

I recall meeting Jeff W at a marketing conference in Atlanta, Georgia. We got talking about a joint venture campaign to his database of some 300,000 prospects. “No problem”, Jeff said. “I’m more than happy to give you access to them with a good quality offer but personally, I’d recommend against it”.

When I asked Jeff why he said that he’d built the list by buying up several smaller lists from list brokers who in turn had built their lists from various other online lists. He’d since tried marketing in various ways to his list but he’d had virtually no response. In short, he didn’t have subscribers or followers; he simply had a list of names which was completely worthless.

To further illustrate, unsolicited referrals are better quality than solicited referrals which in turn are better quality than those coming from a print media advertisement which are better quality than those leads generated by Pay Per Click and so on.

4. Failure to trial and measure

As I write this I’m under contract to one of Australia’s largest universities to complete a strategic plan review. I’m half way through completing a survey of stakeholders in an attempt to identify “Specific Unmet Needs” (see Article2 of this series).

This morning I called a survey respondent to ask her the questions I’d set out. Rosie (not her real name) was very friendly as I introduced myself. During the pre-survey small talk she let it slip that she’d completed a PHD in conducting surveys.

I asked for her opinion on my take on surveys; that they were “generally indicative but never conclusive”. Thankfully, she agreed wholeheartedly.

What I mean by that statement is that the marketplace will quickly tell you what they don’t like and will give you minor hints as to what they want. However it’s extremely rare that any significant breakthrough ideas are uncovered by surveys.

A standard step in between surveys and putting a product into the market that many larger companies take is to “market test” a product. If it bombs in testing, then the idea is scrapped. If it does well in testing, then a heavier investment is made into getting the product to market in commercial quantities.

Market testing is clearly more indicative of likely success but it’s still not conclusive. Remember Cherry Coke and Windows Vista? Both bombed after two of the most extensive testing campaigns in the history of business. What this confirms is that whilst market testing is often indicative of future success or failure, it’s by no means conclusive.

The moral to the story here is this: when it comes to figuring out if a product will fly or die nothing, nothing, nothing beats putting it into the market and asking people to pay for it.

In mistake #1 above I admonished you to commit to continually develop and refine new marketing systems. In this point I’m recommending that you commit to continually putting new product refinements and/or new products into a commercial market place to see if they fly or die.

5. A failure to measure ROI (return on investment)

This is related to #4 above but it’s not quite the same. Whilst the above is about trying new stuff and measuring the result to see if it works, this point is more about measuring the commercial return on your marketing investment.

Anytime you invest money in marketing, be it directly into an advertisement or similar and/or hiring someone, you need to track the number of leads, number of clients, average sale against the source of those leads and figure out how much each lead and each client is costing you on average.

How much does each lead cost you? And, more importantly, how much does each new client cost you? Each of these numbers must be measured by source.

For example, the cost of acquisition from referrals will be a lot less than the cost of acquisition from paid media advertising. That doesn’t mean that you should drop some sources but rather the practice of measuring, firstly, gives you a benchmark for the future for when a source’s quality sours (that can happen) and, secondly, helps you figure out how much to invest in that source in future.

6. Needing to make a profit on the first sale

This mistake could be expressed by thinking that “the purpose of a client is to get a sale”. It’s far more profitable to reverse it and understand that “the purpose of a sale is to get a client”. In short, figure out the average profit per transaction, the average number of transactions per year and the average number of years that a client will stay. Multiply those three figures and you have the lifetime value of a client. Once you know that number, then you’ll probably be more comfortable with breaking even on the first transaction with a new client or even losing money on it, because you have proven that the ROI is likely to be in excess of several thousand percent. Given its reliability, I’d invest in that scenario in a heartbeat.

7. Relying on one source

Just as with investments, security lies in diversity. On the next page you’ll find just a few of the possible lead sources that are at your disposal. The more lead generation sources that you develop and refine systems for, the more secure your future will be (refer to the first page of this part). Remember: think many trickles, not a flood.

A note on split testing

Split testing is where you make one change in an offer and measure the results before and after that change. Normally the alternate version is promoted at the same time as the original offer. For example, you might create two web pages with an identical offer and identical copy other than a different heading. You’d then drive traffic to each page and measure which one converts the best. Then you’d drop the worst performing one, change something else (perhaps the price or add a guarantee or testimonials if permitted) and then drive traffic and measure again. Etc.

Whilst this principle is brilliant in theory, it’s actually quite difficult for small businesses to measure effectively, simply because we rarely have the resources to get enough people in front of each offer in order to come to a reasonably conclusive result. How many do you need? One expert on split testing that I asked said that I’d need to get each offer in front of 30,000 people. The reason that the number is so high is because of many variables including where you’re driving them from, what hit the news that morning, what competitor offers are out there, the weather (yes it affects results) and dozens of other factors.

So by all means split test but don’t jump to conclusions unless you are 90% certain that the results are conclusive. Otherwise you’ll simply run around in circles.

Action Item

Use the following list to identify seven lead generation sources that you will implement. Schedule time to discover how to create them (visit www.amazon.com and search for each one) and then more time to implement and measure results.

A SELECTION OF LEAD SOURCES

Note: this list is not intended to be exhaustive but it should give you enough to get started.