It can be very seductive to look at the number of leads you have compiled and be satisfied, however, those figures can be deceiving and may ultimately do nothing for your bottom line.
“More leads” does not mean “better,” sales are the only objective. You can generate a million leads, but if none of them convert then you just wasted resources.
All Leads Are Not Created Equal
A quality lead is not someone that just gives you their contact information, but also fits the profile of your target demographic. If they do not fit the demographic, they will most likely not convert and hinder the efficiency of your lead generation campaign. In economics, there is a concept called “the point of diminishing returns” when the effort/resources expended becomes disproportionately high compared to the output. Having a large list of unqualified names is not only unprofitable but puts a huge strain on your customer acquisition process.
Some customers are more ideal than others, meaning they will spend more, purchase related products your company offers and refer other clients to you. How you find the ideal lead is by analyzing your existing customer base, finding the high-quality customers and documenting the attributes that make up the ideal prospect. When you clearly know the leads you want to target, you reduce your CAC. There are numerous products and services offered by companies that can track analytics and can show you which channels to use to best convert.
Focus On Retention Not Just Acquisition
The best way to generate leads is to spend more on customer retention and less on customer acquisition. Studies show that only 12 percent of marketers focus on retention, despite the fact that it costs five times as much to acquire a new lead as opposed to retaining an old one.
When devoting resources to existing customers to either up sell, cross-sell, or resell your efforts will be focused and have a much higher probability of converting. A study by Bain & Company showed that just a 5 per cent increase in retention spending can yield anywhere from 25 per cent to 95 per cent in returns! This is especially true if you already started with a base of high-quality leads.
Quality over Quantity
It’s not about collecting as many leads as possible but rather collecting leads that are most likely to lead to a sale or stay engaged as a trademark advocate. These leads get added to the database where future communication with this lead is much more customized and most likely stems directly from a sales representative. In this screenplay, a brand would measure their spend vs the number of qualified leads that turned into sales. The benefit that a lead would typically receive in this scenario would be a bounce-back offer towards the purchase.
How to Compile High-Quality Leads
To achieve a higher ROI, the answer is always quality leads.
One way to do so is by adding a question to your contact form. This will tell you who they are and the information you provide them is the value prop. Consider other incentives for your audience such as savings and unlocking “premium” content. This will not only draw more people to your content, but further establish that the lead has a need for what your brand provides, and hopefully your products/services.
Although businesses should be focused on generating high-quality leads, this does not mean there are “bad” leads. Some leads may not be ready to convert, and if your company can afford an outbound contact center or automated response service to make a connection with leads can be an invaluable solution to reducing the cost of customer acquisition.