Investing in lead generation isn’t just important to grow a business — it’s crucial.
What is lead generation? Lead generation is the process of looking for new clients — i.e., leads — and sparking their interest in your product or service. New leads must be found and pursued before they can turn into new customers and bring in profit.
Not every lead will result in a sale, however, though effective business development still depends on this strategic prospecting. Without it, major issues can arise.
The problem of not investing in lead generation.
If a business conducts direct-to-customer sales but doesn’t allocate sufficient resources to finding those customers, then it may fail to attract them. This can mean fewer orders and less cash flow. Depending on how severe these problems become, the business may struggle to stay afloat or even go under.
That’s why any business that makes direct-to-consumer sales needs to prioritize lead generation eco-system, but that’s not all. Companies should also build and employ an accurate model that predicts how to acquire customers.
Lead generation models
Models for obtaining clients need to be developed for each product or service a business offers. These models should tell founders which prospecting strategies have a track record of success, bringing people in the door and down the sales funnel. At the same time, they should identify which lead-generation efforts have failed to justify themselves with an adequate return on investment.
The reasoning behind this is simple: these models enable businesses to determine which approaches deserve future allocations. In addition, they should also forecast how much it costs to acquire a customer.
Without this ability to track and predict, founders have no idea where their lead-generation budget is best spent. They also won’t be able to tell how much of their revenue needs to be budgeted toward lead generation.
Making business into an equation
The costs of acquisition need to be factored into the expenses of running the business. This helps determine the prices for products or services, guiding the business toward offering a high-priced, premium product or a cheap, subprime product that will be available to the masses.
This fundamental step in the business’s development provides one example of how empirical data should inform business decisions. In other words, entrepreneurs should make their businesses an equation.
To the extent founders render their company’s operations predictable, the scaling process becomes easier. Smart prospecting not only leads to dependable results but also drives future decisions.
How to find leads
In my experience, a combination of both online and offline approaches generates the most viable leads.
Online tactics include anything that involves a screen, whether it be a computer monitor or a smartphone. Some examples this includes the company’s social media posts, website, emails, texts, and mentions in digital publications.
Offline marketing doesn’t necessarily require a screen. Examples would be billboards, print newspaper advertisements, and telemarketing.
Both online and offline marketing tactics are necessary. It’s important to meet different kinds of customers where they are, and some customers prefer different means of engagement — but this isn’t the only reason why both are needed.
It takes a combination of both online and offline approaches to constantly engage and re-engage consumers throughout their journey with a company. The way a business attracts a first-time customer is different from the way it should try to bring back a previous customer.
To acquire new customers, the business should use methods with lower acquisition costs. This is important, especially at the beginning, when the company is new.
Social media platforms are fantastic for this approach — they can send highly-targeted ads to specific demographic groups, affinity niches, or geographic areas for surprisingly little money.
On the other hand, the business should already have some authority with previous customers. When the business wants to re-engage these, it makes sense to place phone calls or send SMS emails. These are low-cost but nonetheless effective ways to reignite the connection.
Every business relies on lead generation, but not every founder handles this prospecting in a way that makes accurate prediction possible. Those that do seize a competitive advantage that bodes well for their success.