A Guide to Lead Generation for Your Business
Lead Generation Explained
All businesses desire brand exposure to gain more awareness, and ultimately grow their customer base. However, getting in front of the right people at the right time and getting them to convert is a tough task. There are a number of ways in which this can be achieved via inbound lead generation (social, blogging etc.), but outbound lead generation is on the rise, offering a more aggressive way of growing your client base.
How Does Lead Generation Work?
A specialist lead generation company will source quality leads for your business, based on who you are trying to target. There are several business models to this:
- Full service lead generation
Your campaign manager will produce a hit list of potential customers, which is segmented in accordance with an initial briefing you give. These leads can then be contacted, generally via telephone.
These lead generation companies will do the contacting for you and report in weekly or monthly on successful enquiries. It’s then up to you to turn these enquiries into conversions.
- Lead Referral Schemes
Other lead generation companies simply refer prospects, either online or offline, and leave it up to you to contact each prospect.
Some companies purely sell data to you, segmented to your particular targeting. This is usually in the form of a database, excavated from trusty sources such as Dun & Bradstreet.
Lead Generation Pricing Models
The pricing model for lead generation services can vary. The full-service lead generation model can either command a set monthly fee, or a pay-per-lead or pay-per-appointment structure (appointments with prospects booked by them).
Lead referral is generally either a cost per lead (CPL) or a cost per acquisition (CPA) – usually the former as it’s lower risk for lead generators.
As rule of thumb, your conversion cost is between £75 to £250 per lead, depending on the specialism of the service.
Database buying is generally a flat fee. The cost of this can be around £3,000 for access to 10,000 companies across 12 months.
What Are the Pros of Lead Generation?
If you are in need of more sales in a hurry, lead generation can help you to grow your business quickly. It’s a relatively simple way to increase your ROI and grow your client base and best of all, you are not having to spend hours and hours researching prospects or building a marketing database.
So, what are the pros?
- Higher Rate of Conversion
Prospects your contact from lead generation companies should have a higher conversion success rate than cold contacts because the prospect is pre-qualified before you ever receive the lead.
As the client, you have a fair amount of flexibility over the types of leads you receive. Within your initial briefing, you can often determine your target market in terms of industry type, company size, turnover, geo location and more, so you have a really segmented hit-list.
There also may be some flexibility over price per lead so it’s always worth negotiating with your chosen lead generation company to get the best rate and to maximise your budget.
You can often set the level of enquiries you receive per month, so you can budget accordingly. A minimum number is advisable, to make it a worthy venture, but it can sometimes be wise to agree a cap on the maximum, so you have more control over your spend.
Just like any other marketing activity, try and allocate a reasonable budget to test it and see if it works for your organisation. If it does, invest a little more.
What Are the Cons of Lead Generation?
Many businesses choose to use lead generation specialists, but some have been stung by lead agencies that have adopted unethical practices, which has unfortunately tainted some people’s opinion of lead generation as a service.
Whilst there are some very reputable agencies in the marketplace, lead generation isn’t a miracle method and it does have some considerations to bear in mind, such as:
- Lack of control over lead
When you purchase a lead, you don’t have control over how many providers that lead is sold to, meaning the lead could be exhausted and somewhat hostile.
- Data accuracy
Watch the small print for caveats on this. Data for prospects should be accurate and up-to-date if it warrants charging for it. Paying for inaccurate or out-of-date information is a waste of your marketing budget.
This is less of an issue with full service lead generation companies as they are responsible for qualifying the prospect and meeting the targets you set, so they are more likely to source clean data and maintain it well.
- Sales experience
Whether you are qualifying the leads yourselves from a direct referral, or you are following up on an initial pitch made by your lead generation company, you will need to ensure you have some decent sales and marketing skills in-house, so that the leads you receive convert at a high sales rate.
If you don’t have the ability to close the sale, there’s little point throwing money at leads.
The Last Word
Whilst there are some pitfalls to avoid, using a reputable lead generation specialist to purchase leads from and possibly outsource the initial sales process to, is still a great way to grow your business. It provides additional sales and marketing resources, freeing you up to carry out other activities within your digital marketing strategy.