How to Develop Great Lead Conversion

by Alan Pollard

The only stat that matters when discussing lead generation is the number of leads that convert into sales. The goal of lead generation is to create a database of people or businesses that have interest in a specific area or share common characteristics. But just because we have a list, does not guarantee sales success! What matters most to you and I is finding the people that want to buy our product or services! Never forget that lead generation is about the quality of leads for your business, not the quantity of the names on the list.

Depending on your goals as a marketer, it is very easy to access qualified leads for your product or service. Lead lists can be "horizontal" or "vertical" and as a marketer it is important that you understand the difference. A horizontal list, is one in which the leads share broad common characteristics, such as homeowners. These types of lists are great for widely used products and services, like security services. Whereas vertical leads are more focused around a specific characteristic, such as homeowners, whose homes have wood exteriors. As a marketer selling painting services, which list would you rather have, vertical or horizontal? You may have the best painting service on the planet, but if I have a brick house, I don't need you and no amount of advertising will change my brick house to wood!

When selecting a lead generation service, it is critical to understand what types of leads are being offered, how they are being created and most importantly how specific they really are for you! Once those facts are understood and applied, you will have tremendous success in your marketing efforts.

How Are Leads Generated?

In the internet world, groups of contacts are created in various ways; including surveys, purchasing habits, common services providers or geographic location, just to name a few. The Internet has allowed lead generation companies to track the surfing habits or users on high volume websites to create "horizontal" leads. The Internet visitor may say "Oh I'm interested in that" and then click through to the page to surf. That path of "interest" is tracked and then sorted to create a list of leads. In order to create a more specific or "vertical" lead, a survey may be offered to determine interest in a business opportunity or product. Typically the survey will have a few questions, which help to define the contact. For example,

Are you interested in full time or part time business?
Are you interested in a business with no or minimal capital investment?
Are you looking for a business that focuses on health and wellness or telecommunication or service?
What are your financial goals?

The next step is to ask specifically if the visitor would like to receive more information on this product or service? If the answer is "Yes", the person is asked to enter an email address. However, in a good lead generation systems, after the potential lead has entered an e-mail address indicating that they want to know more, the system automatically sends an confirmation e-mail, which is referred to as a "double opt-in" system. The double opt-in system helps cut down on paying for inaccurate or fraudulent e-mails.

Through the survey process, the leads are filtered into prospect categories. This survey and filtering process creates leads that are now pre-qualified as someone with interest and targeted to a specific interest. Obviously the type of lead created from the survey, is much different than the lead created from the surfing habits of a visitor. In other words, with a "vertical" lead, you have a qualified lead that really wants your product and most importantly wants to hear from you!

What makes a "BAD" Lead Generation System?

The hype about what makes a good lead generation system abounds. Because of the availability and low cost of the Internet, people are pushing any list of e-mail addresses as a lead generation system. You may think "Wow! If I just play the numbers game … I send out a million e-mails then I'm going to get some percentage back." Some lists are no different than picking up your phone book and saying, "Look at all these leads I have." '

In today's email world ask yourself, "What are the chances that your e-mail will get be opened"? For example on my Yahoo account, every time I get junk mail, I report it and Yahoo blocks the address. I get 40 - 50 junk emails a day. If a legitimate business opportunity is mixed in amongst these, it has little chance of it standing out enough that I will look at it. Some of these junk mail messages do not even include a legitimate e-mail address. Not having a legitimate return address is my biggest tip (and the easiest way to systematically filter them out with software) when determining the legitimacy of an opportunity. If you're not willing to send out e-mail with your return address on it, frankly you're wasting your time and energy.

Like any other business decision, you don't get something for nothing. It's important to understand the return on investment of a solid lead generation program. There are only so many hours in the day, regardless of how "automated" your systems is. How long will it take you to send out one thousand e-mails to unqualified prospects, versus how long will it take you to send out 5 e-mails to someone you know wants to talk to you? At the end of the day, your success is measured by how many new sales you have created, not on how much email you have sent.

What makes a "GOOD" Lead Generation System?

All leads are good! What makes them good is how they get used in a marketing program. A good vertical lead generation is an excellent tool because it's targeted to people who are looking for specific products and opportunities and most importantly they want to talk to you about those opportunities. A good horizontal lead generation is an excellent tool as well, because it's targeted to large groups of people who are looking for general products and services.

As we mentioned earlier there are various levels of qualification and the result is either a "horizontal" or "vertical" lead. In direct sales, vertical leads are the key to success. A good example would be if you walk into WalMart, yes--you are a potential customer at that store. However, walking in the door doesn't indicate you want to create your own retail store. No amount of marketing will change my mind about getting into the retail business, if I just stopped by WalMart for toilet paper.

A good lead generation system has pre-qualified a prospect in some way. Those qualified leads are GOLD, when they get applied in effective marketing programs. It is critical for you to do your homework, before you use lead generation tools, or nothing will work. Define your audience, find the list of qualified leads that meets your definition and market your products.

What Should I Expect to Pay?

The price of a "lead" gets determined by how current it is, how targeted it is and how exclusive it is. Ideally, you want a lead that is current (within 30 days), targeted to your needs, and somewhat exclusive (you don't want 100 other companies talking to your lead!). If you want to share that lead with someone else, do not need a current lead, or are willing to have more general demographics, then the prices are lower.

Based on the factors above, you should expect to pay 2 to 5 dollars per lead. However, if every person you sign up purchases product for a commission value of a hundred dollars, then you may be willing to spend much more than that for 100 leads that create 30 to 40 new clients for you. The exclusivity and vertical alternatives allow you to customize your leads to fit your budget and philosophy. But remember, you don't just get lucky. Understand your audience and buy accordingly!

Summary

Electronic advertising and marketing has matured quickly in the last few years. It is an effective and powerful tool when designed and used correctly. Determine what you want and only buy the leads that meet your needs. Don't be afraid to ask the tough questions of anyone selling you leads!

Does the lead generation use a double opt-in system?
How well does it fit my target audience?
How recent of a lead is this? (Is it a new lead, old lead, hot lead?)
Is it an exclusive lead or shared lead?

Always keep in mind the true cost of lead generation, is the cost per lead conversion, not the cost of the individual lead. You may pay $100 for a 10,000 leads and only get 2 sales, whereas you may pay $100 for 50 leads and get 10 new sales. In the first case, cost of conversion is $50 but only $10 in the second. My money is on quality, not quantity.