Every company has lead generation resources and some are not as effective as others. Interestingly, companies keep their lead gen sources, even the ones that aren't working as well because they're afraid that the little bit of value that they do bring means that they're going to leave money on the table if they lose them altogether. Really what we're trying to do in this lead generation set of episodes here on Totally Hyped is to show you that you can build your own lead generation systems and you can hone them in such a way that they'll be the best lead generation systems you have. A lot of companies are of the belief that when leads come in, no matter where the leads come from, if the leads don't convert, that it's on the sales team.
Jack Lemmon: The leads are weak
Alec Baldwin: The leads are weak. Fucking leads are weak? You are weak.
Cale: That is one of my favorite scenes in one of my favorite movies, Glengarry Glen Ross. The reality though is much of a lead's quality and the sales team's ability to close those leads is really based on how the lead was collected or generated in the first place. There's hundreds of things to consider and decisions that go into building a good lead generation System. In fact, each lead generation system for each product, each service, or each audience, every one of those aspects means that the lead gen system will be different. If you're marketing one product to more than one audience, you're not going to have the same lead gen system for both. You're going to probably be asking different questions.
Depending on what you're selling, the oompf it takes to build an effective lead generation system is going to vary. That's a whole other thing that you have to consider. For example how much do you need to consider, or how much does a prospect need to consider when they're buying a home? How much information does one need to collect if you're the realtor in order to be able to sell a home? Consider the decision process for buying, let's say, an oil change. Are they open? Can they take me right away? That's almost it.
A lot of times in those situations, it might be based on convenience, where I am, do I have time, but the idea of choosing or deciding that I'm going to get my oil change from this place is a much shorter path than it is to buy a house or buy a car. You can take a look at buying a car versus buying a T-shirt. That doesn't mean that the competition is any less fierce. In any of those scenarios, it doesn't mean that you're not up against it, just as much when you're selling t-shirts, as you are selling cars or selling homes. No matter what you're selling, there's hurdles, and they're different. Some of them might be that you have a lot more competition to weed through. Some of them might be that the thing you're selling is much more complex.
When I say complex, buying a home is just a big thing. Buying a car is a pretty big deal. There's a lot of things that go into those decisions and into those sales, but I would also argue that something that seems maybe a little bit more simple, buying a piece of software, for example, might be way more complex because, let's say, your company's going to adopt a new piece of software, implementing that is very difficult.
The decision to go with that piece of software, it has such a ripple effect. You have to really be concerned with what's it going to take for us to actually switch to the software? I use switching banks all the time, as an example. It's not really hard to go switch banks. I could go to any bank right now and open up an account, but if I already have an account, I have to consider, what about all the bills I have auto-paid through there? What about balances? There's a lot to consider. It's kind of a pain in the ass to switch your banks, even though it's kind of easy to switch your banks.
That's what I'm talking about, about the complexity. It's not just as simple as saying that it's a big product versus a small product, or what have you. It really is this-- the layers that go into making the decision. I think the rule of thumb is when the amount of trust required to make a purchase is greater, the path to purchase is longer, and vice versa. The path, if you're buying an oil change is shorter, just because the amount of trust-- it's a commoditized business. If I go to one place that feels like, "Well, it's the same as the other place, just maybe they use a different oil. This one's more convenient, but it feels pretty much the same," as opposed to the amount of trust I have to have in somebody to buy a car. This car might not work in 10 days.
I know that sounds really obvious. "Duh, Captain Obvious." I'm going to tell you right now that understanding that the process to purchase is longer for something that is more complex or requires more trust, people say they get it, that sounds so obvious, but they screw the pooch all the time on this thing. Consider-- everybody's familiar with buying a car. According to Google's research on what it takes to sell a car, it takes 108 days from the time somebody has an inkling to buy a car until they purchase. 108 days. It doesn't take you 108 days to think about where you're going for lunch. It'd probably be better for my waistline if I did. In Google's research, they found that there's at least five points of consideration, five moments that a buyer has to go through before signing on the line, which is dotted.
The best leads are going to come to those who have been with the buyer through those five points. Basically, the five points are similar for every business, except for the more complex, you might have maybe nine points of consideration, and the easier you maybe only have two or three, but at the end of the day, this is your marketing funnel. It's awareness, interest, decision, action.
Always remember those four things. You'll see a billion marketing funnels out there. Some will be way bigger than that, many more layers, and probably the most simple one, I think, is about four layers with the awareness, interest, decision, and action. The best leads are going to come to those companies who are with the buyer through all of those phases. If you start your marketing and advertising campaigns at the awareness level, you're going to have a better shot when it comes time to signing on the dotted line than as somebody who's trying to jump in at that sign on the dotted line point of the marketing funnel. People screw this up all the time because they don't believe that lead generators belong at the top of the funnel, but they do.
Getting somebody interested in your product, they might sign up for a white paper. They might ask for an email or they might-- there's a million things that they could do, they might watch your video. If you're there then, they become aware of you at that point and aware of maybe the product or service that you have at that point, and then they're going through this, "Oh, you know what? This is interesting. What else is out there?" Then they go through, "Now that I know what else is out there, I wonder which one I should buy." If you're there at all of those points, your close rate will be better.
They're going to already have some familiarity with you. They're probably going to trust you a little bit more. A lot of companies don't even start at that point. They're starting at the "Hey, when they're about to make a decision, let's jump in there and try to be one of the people that they choose or one of the products that they choose." B2B, when you talk about complexity and going through that buyer journey, B2B leads are even more complex. They require more trust because companies are much more difficult ships to maneuver. Decisions are often made by a committee, not by one person. Then the process of making change actually happen throughout their organization is obviously more complex.
We know that not one size fits all when it comes to lead generation. We just talked about it. At the end of the day, the more complex or the more trust that's required in your purchase, your lead generation system has to be up for the challenge. The first thing that one needs to consider to build the perfect lead generation beast is why would someone provide you their information to buy your product or your service or get your information? If there are 10 lead collection sources sitting in front of them, why would they fill out your form? Why would they look to your lead generation system?
Oftentimes, it's based on, "When I fill out this form, what am I going to get in return? Am I going to get spammed? Am I going to get a phone call? Am I going to get--" whatever. You oftentimes have to build in some sort of an incentive, and sometimes the incentive doesn't have to necessarily be something extra, just has to be something that you're pointing out. If your lead generation system offers more convenience, more trust, better reputation, a return on investment, interesting things like giveaways, being more helpful, or just that you have the thing that allows them to keep up with the Joneses, a lot of it is just positioning.
If you just position your lead generator properly, like, "Oh, you get to be as awesome as everybody else, just give us your email address, and we'll send you," make sure that those incentives and things are obviously aligned, and quite frankly, you can spend money on the incentives, but I don't think you need to. What are the reasons why someone will fill out your lead gen system, or your lead gen form, rather than your competitors? They're both just sitting there, maybe they'll fill up both. What are you going to do to stand out once they do?
Now, when I sit down with clients and go through this exercise, one of two things happens. They either blow this whole exercise off, it's like pulling teeth to get them to sit down and say, "Why are you different than your competitors? What are we offering here that they're not?" why is someone going to fill out your form? Either blow it off, or they struggle, and all we're really doing is talking about differentiators. Differentiators are basically 101 to advertising marketing, but people struggle with that, especially in commoditized arenas, right?
Let's go to oil changes, sandwiches, burgers, there's a billion places that you can do any of those things, and why choose one over the other? I've had this conversation with a lot of people over the years. I tell the story, I used to live in this place where there's a McDonald's right by my house, and I would stop by to get a cup of coffee, maybe a sandwich in the morning. There was also a McDonald's that was right by where I worked. Every day even if it was just a cup of coffee, every day, there would be, "Why did I choose one over the other?" They're both fricking McDonald's. I mean, aren't I getting the same coffee? If I get a sandwich, aren't I getting the same sandwich?
There's all kinds of different reasons why I would choose one over the other. One was slightly more convenient, and both a right turn in and a right turn out. Made a little bit faster, but one was cleaner. The service was always better, and I would probably choose that one. In fact, I don't know if you know this, but there can be differences in pricing at McDonald's. If you have a franchise-owned McDonald's versus a franchisee-owned McDonald's-- I'm sorry, a corporate-owned McDonald's over a franchise-owned McDonald's, and one was actually cheaper than the other, and I would still choose the more expensive one because of the things that mattered to me when I made that choice.
At the end of the day, all I'm saying is that you need to differentiate yourself. It can be a myriad of things that you can use to differentiate yourself when it comes to getting a lead. I don't love when people just say, "Well, if you give us this lead, you'll get 15% off." I'm not a big fan of just always devaluing your product or service. I don't like starting there, but you could flip that, and instead of making it less expensive, just show that there's more value buying yours. Same price, but you get more. It's something that works, and you just have to be good at doing it, right?
I think that that's probably the bottom line, but I also believe that you can create your own differentiators. In the book, The Challenger Sale, there's a great story in there about Grainger and how the new marketing VP had to go through the process of what makes us different from other facilities, maintenance supply companies. The one line in there that just resonated with me was, she said, "That process took us to a very dark place for about eight months." I was like, "Holy balls, you can't--" Took eight months to figure out. What they actually wound up doing was creating their own differentiator, and the story is a great one. If you need to create your own differentiator, create your own differentiator.
How you do that basically is by packaging. "You don't just get this from us. You get this, this and this," stuff you probably would have given away anyway, stuff you would have included anyway, you're just saying it. What Grainger did in that situation was proved to people that a good part of the budget that they would spend on facilities maintenance was something that Grainger never was in the running for, but made themselves a front runner and a way for them to get better deals for that part of the budget. That just made them more valuable, and they not only sold services because of that, they got more of the business that they originally started out to get anyway, but be aware that no matter what you're giving away, no matter what you're proving, no matter how much value you're showing, it's actually hard.
People don't realize this, but it's hard to get the right people to fill out the right form with the right information. The idea of what you're giving to them has to be not just because you believe that what you're giving away is of this great value, they need to believe that there's some great value in getting the information or getting the return from filling out that form.
I believe I mentioned this in the last episode, there have been a couple of times where I've downloaded white papers and when you're filling out that form to get a white paper, sometimes those forms are a little too robust, right? First name, last name, email address, company you work for, how many people work for your company, and you look at that, you're like, "Ah, geez. I'm probably going to lie about most of it anyway, but I want the white paper," and the white paper was so good. I wasn't really even interested in their product, but I kind of wanted to get their product. If it would have made more sense for me, I probably would have bought it, but really what I was doing most of the time is I'm looking at how do these guys do it compared to how do I do it.
Again, it's very difficult to get people to fill out forms that. Everybody's skeptical right upfront. People just assume that if I fill out that form, I'm getting spammed. So, at the end of the day, if your reputation is either unknown or not good, it's really tough. If your reputation is stellar, and the value of what you're giving away, you'll do a lot better in the lead collection area.
A simple contact form on your website is one thing, and a lot of people, that's all they have for lead generation is just, "Hey, contact us. First name, last name, email address. Tell us what you want." Now, that might be okay for some things, but if you sell multiple products, sell multiple services, maybe you have different information, maybe they can sign up for events, whatever, one form is not going to cut it. You got to be able to have basically a form that's going to collect the right information for the right reason.
Now, the only time a simple contact form on your website is going to do-- just one single contact form on your website is going to cut it is if it can have logic to it to say that, "If this is what you're looking for, here's the information we need," or, "If this is what you're looking for," the same form can then ask different questions.
I'll give you an example of this. I worked with a national lawn maintenance company. It was a while ago, but I don't think that they did real landscaping. They mowed lawns, did basic maintenance, that type of thing, and they did it for a lot of businesses. Just one in our area, the southeastern Wisconsin area, the one franchisee had 6,000 customers. I mean, it was a pretty significant operation.
Anyway, when we were building up their contact form, these guys are selling everything from snow plowing in the winter and lawn maintenance fertilizing, those types of things during the summer, and they also had a service for mosquito control, which is a huge problem around here. The joke is in Wisconsin, the mosquito is the state bird. Anyway, they had this thing, and they wanted one form, they didn't want different forms for everything. If you checked a box that said, "I'm interested in mosquito control," then the following questions would appear and be about, "Well, where do you live? Do you live by standing water," and things like this.If you had multiple selections, your form would just be more robust. If you had, like, "I just need my lawn mowed," then you just had a few-- how many acres and all that kind of thing.
It was basically a Request a Quote, but you had different things that you could request a quote for. I think the snow plowing one was the driveway in and things of that nature and where you live. If you don't have that kind of capability to make one form do multiple things, you got to have multiple forms. Otherwise, you're not doing yourself a whole lot of good by saying, "What's your name and email address? We'll get back to you." Then somebody has to start the conversation of-- it's not very helpful. If you have that kind of sophistication at your fingertips, and you can make a form be kind of more robust like that, you can probably do it with one form.
We're just talking about a contact form on your website. There's great things about having a contact form on your website, and there's bad things about having a contact form on your website. The great thing about having a contact form on your website, and that being basically your only thing is that you have control over your website. Even if somebody else builds it for you, you can take up as much space with your forms. You can explain your forms. You can put as much content leading up to your forms. You can really build a great funnel there. That's the one advantage of putting that contact form on your website.
The disadvantage though is that it's only on your website. If there's, let's say, 100,000 prospects out there total, you're probably never going to have all 100,000 prospects, looking at your website ever. There's a lot that you have to do there. You really do want your lead generators in as many places as possible. Those places need to make sense. If your website has great traffic, and a low bounce rate, absolutely should have one there.
I'll use recruitment marketing as a segue into using third-party generators, you can have a "Fill out the application and submit your resume here" form on your website, but of course, you're probably going to use Indeed and probably LinkedIn, and a number of other resources probably to put your job out there for candidates to see. We are in a very strange recruitment moment in time right now. It's hard to get in front of the right people, it's hard to get-- a lot of the rock stars aren't looking for jobs. If we're using recruitment marketing as, "I'm looking for leads of good talent," then I got to be out there. Indeed is one thing, but everyone's there. Every other job is there. LinkedIn is another one, but everyone's there. All your competitor's jobs are right there as well.
How can you get-- and quite frankly, the rock stars aren't going there because they're not even looking. How do you find a rock star? How do you get in front of them? If you know your audience, you can put a form or a link to a form anywhere on the internet. You're going to get a lead that you would never have gotten by being on LinkedIn or Indeed, or even on your own website.
Putting your lead generators out there is key. That brings us to the third part. We talked about LinkedIn, and Indeed. In the automotive world, it's Autotrader, cars.com. We've talked about this in the other episode, those are absolute lead generators. You probably need to be there at some level. The problem with them is you're beholden to only what they have, you don't get to say, "I want different form fields. I want different information around my form," you don't get to say that. That's up to them.
That's one thing you need to consider. However, it is very difficult to say that you shouldn't be there. You should, and you should be in other places. Getting your leads out there in places that aren't set up like that, that are just potentially where a prospect might be, and it's not typically a lead generating place, is a challenge, but there are companies out there that help you do this.
I'm involved in a company called AhaLeads and we do just that. We have lead generation forms that we can put anywhere. You see the content of a topic that is ripe for your prospects. We can get you a form there, the exact right form, in fact. We're not the only company out there that does it, but I'm involved in that, and those do exist. Check 'em out. Ours is ahaleads.com, but just go ahead and search for lead generators. I'm not here to sell you that specifically, but it's awesome to be able to do that for companies. We've been doing it for companies for years and years and years since before anybody even thought of the web as being a lead generation resource.
You got to put them in the right places. When I talk about placing lead generators, it's a case-by-case effort. For every single company, for every single product, for every single audience, for everything that you can think, there's going to be variables there and have to be tended to that make a difference. It's impossible to just say, "Well, all your lead generators should be here." Your situation is going to be different than anybody else's. It's probably one of the areas that you need probably help with. You should call somebody like a marketing expert, and when you look for a marketing expert, really look at companies that are well-versed and focused on leads because a lot of them aren't, a lot of them are, "Let's do social media, let's do TV." At the end of the day, they're going to say, "Look, we got you more leads," but that wasn't their focus. The leads just happened to be coming in because more people were aware of you and they ended up on your website or what have you.
We'll talk about promotion in the next episode; promoting and placing your leads. We'll talk about that in more detail in the next episode, but it's vital that you understand that your leads need to be in multiple places and where your prospects are most likely to be. The next thing that we need to talk about though is understanding what a lead is worth. If you're going to build the perfect lead-generating machine and you don't know how much your leads are worth now, shame on you. We're going to run through how to figure that out easily and quickly, but you should know that because it's part and parcel to everything like your budget.
Are you spending too much on your leads? Are you losing money generating leads? Is there a better way? You don't know that until the value of your leads. The other thing that you got to really consider there is if you miss the mark on what your leads are worth, either way, if you miss it because you undervalue it or you overvalue it, you're kind of killing yourself. If you undervalue it, you're probably missing opportunity. If you overvalue it, you're probably missing opportunity and losing money. The two ways to figure out what leads are worth are just figure out where you are right now and what they're worth right now. Then the other way is to systematically go through and find out or what the value of a lead should be.
We're going to use really simple numbers for this. Hopefully, my math won't fail me while we're doing this, but to figure out what the value of your leads are currently, first, you have to figure out what your conversion rate is. That really is just how many leads do I take in over a given period of time, a year, a month quarter, and then how many of those leads convert to a sale? Then the next thing you need to do is figure out what your average sale is. The formula really is this. You multiply your average sale times your conversion rate, which would be a percentage.
For this example, we'll say we collected over a period of time 100 leads and 20 of them converted the sales, which means our conversion rate is about 20%. Not about. It is exactly 20%. If your average sale is $1,000 and you multiply your $1,000 times your 20% conversion rate, the current value of a lead for you is $200. There are more complex things that you can do here. For my money, I'd want to know what a lifetime value of a customer is. Other things that might be normal parts of a relationship, like when I get a customer, usually they refer to people and that means this much money.
You might want to calculate those things in that a lead is just not like this one thing. This customer stays with me for three years, and over three years, he spends $4,000 with me, and usually, refers two or three people to me, and that equals this much money. Then you calculate all that in and just say that the average sale is this much money times my 20% close rate.
It can get a little complex, but for my money, I'd want to know some of those other variables to add in there just to be a little bit more complete, and also, where can I improve? My main goal is to improve the sheer number of leads and then the conversion rate. If I just did those two things, that's going to be huge, but if I can also increase the average life of a customer and how many referrals I get, those are all just bonuses. Without question, you've got to consider those things, but if you want just a benchmark, you can make it simple.
If we're building the perfect lead generation piece, then we have to talk about continual improvement. We've just figured out what our current rate is. We've taken our conversion rate, the number of leads over a period of time, how many of them converted to sales? Then we've multiplied that times our average sale. What we need to do now is look at each individual lead resource, we need to look at all of these things so that we can start saying, "Okay, how can we make this better?" Then we work through a process and it takes some time to get to a point where we realize that on average, this is where you should be.
Those are really important things to know both where you are right now, where you should be. I can't stress that enough because it's the only way in which you can determine whether you're doing a good job or not, whether the amount of money you're spending to get those leads is worth the investment, and where do you go from here? Are there cheaper ways? Are there more expensive ways that'll get me better results? You really have to understand what your tolerance is. You have to understand what these things should cost and what you're getting out of it.
Lead generation, in my opinion, should be its own line item in your marketing budget. Not just some bullshit namby-pamby line item. In my opinion, lead generation should be at the top of the list, and then everything that you already have a line item for should be a subcategory of lead generation. Why are you doing social media? Why are you advertising here, there, and wherever you're advertising? All of it is at some level aimed at getting new customers.
I once heard a guy, he was a newly minted CEO, I heard him say this and I know that he believed it. He's like, "Why do any marketing or advertising if not to generate leads?" Now, he's not wrong about that to a certain extent, it's obviously more complex than that, but he then also proceeded to focus on a bunch of efforts and a bunch of budget and all the wrong things. Your whole goal is to generate leads, but either way, the point of it is not horrible. It's not completely wrong. Argue the point.
The only way to really measure and track your marketing ROI is to set all of your marketing processes up to properly generate leads. It's the only way you can say, "Here's how we're doing it." Now, some things are going to be really easy. "Here's a lead generator that's near the bottom of the funnel. When we get these leads, we can see that they went to here and then they converted to a sale."
Some other things though higher up on the sales funnel might be more difficult because they're not going to convert to a lead right away. There might be a number of steps in between. It's going to be a little bit more complex to measure those things. Those things that start higher up that are harder to measure are probably going to convert at a higher rate. The things that are lower on the funnel will be easier to track, but probably convert at a lower rate. Isn't that the way of everything? Why can't it just be easy?
Again, I do want to go back to one point I made earlier when we're talking about marketing ROI that you have to realize that the more complex your buying process is, the process to buy A product from you or services from you, the more trust that's required, the more complex your system's going to have to be. That's just all there is to it. It's going to have to have more points and it's going to have to be in more places. When your system is set up properly, every effort can be measured against its own part in getting the results that end in a lead.
We've talked about a bunch of stuff. We've talked about incentives and making it worth someone's time to fill out your lead generation form. We've talked about placing a little bit, not too much, but we talked about the value of lead, understanding the value, understanding how to then take that value, and make it mean something by setting it up properly within your marketing budgets, and then being able to measure like, "I've spent this, and this is how I ended up getting X amount of leads, and I know a lead's worth, this is what it means to our company." Those are all very, very valid things.
They're all part of this process of building a great lead generation system, but I'm going to leave you on probably the most important part, and the most important part to building the perfect lead generation beast is the lead collection form itself. We've mentioned a few areas here that are areas where people make mistakes. This one is one of those areas. In fact, it's the most common. The good news is it's also the easiest to fix.
The problem lies really in this balance between collecting the information you'd like to have and the information prospects are willing to give. I ask clients all the time to consider what is all of the information you'd need from start to finish to complete a sale. Then we break that down to the information that's required at different stages or for different offers or different incentives.
In any relationship, the starting point is not to tell me everything right now, just to see if we're going to continue, if you're qualified. It's a process. Like I've said before, the process is more or less complex based on the complexity of the decision or the depth of trust that's required. If you're selling oil changes, it has to be easier for somebody to get from awareness to purchase than it would be if you were buying a car, but you start in the same place. I still need your information. If I'm scheduling an oil change, I still need to know who you are when you're coming.
The thing that keeps prospects from filling out the form the lead generation form the most is that it's too difficult or time-consuming. It feels too invasive. You look at a form and you're like, "I'm not doing that. It's just too much." Even those white papers I've talked about in the past, you want to know, "Geez, you want to know my role, how many people are in my-- I just want a fricking PDF," [chuckles] but it's the truth. I look at it, and quite frankly, I'm like, "Well, if I want that thing bad enough, I'll just lie." On the other end of the spectrum though, your conversion rates are going to be way down if you're selling something much more complex, like cars or homes, and you only ask for a name and an email address.
That next step is pretty freaking hard, right? "Hi, I heard that you filled out your name and email address on our website." You have no idea what the make, model is. You don't know what kind of house they're looking at. You don't know anything. There's a balance, right? At the end of the day, that's all I'm saying is that there's a balance. If you're giving something of great value away, you can ask information from them.
Sometimes it's required, right? If you're asking for a loan, if this is a lead for a bank, you might need a Social Security number. You might need some things that people might expect to give, and they might not expect to give, and they might not want to give. If you're going to really get a loan, you're going to have to provide that at some point in time. Vice versa. If I'm entering to win a T-shirt, I'm not giving you my Social Security number. While it's a little bit subjective, the rule of thumb here is that you ask for the amount of information that's in line with what the prospect will receive from filling out the form.
We say it all the time that when I was in radio years and years ago, if you're giving away a CD, email, first name, that's it. Giving away a car, I can ask for a lot more, but really to figure out what the form should look like and what the right amount of information is you need to really objectively put yourself in the prospect's shoes and ask, "Would I give this information for what I know I'm about to receive?" If you answer that truthfully, you'll either have a much more effective lead generation form, or you're going to up the ante in what a prospect will receive from submitting your form.
That's it. If you just follow these simple things and they are simple, I mean, it took me 45 minutes or so to tell you, or 30 minutes to tell you, but they're really not that difficult to do. You do have to work through them, but they're not that hard. In the next episode in this series, we're going to discuss placing and promoting your lead generation systems.