Episode 2 – Five Numbers Podcast
Episode 2 of the Five Numbers Podcast – Leads
Today, we are looking at the first Number – Leads and how to get more.
Just remember, exponential growth does not require a massive increase in one area but relatively small increases across the 5 Numbers.
We are looking for 10 1% ideas.
But having said that leads is one area where you can get a massive increase 40% to 200% if you find the right marketing channel.
Leads are the role of the marketing division of your business. The primary role of marketing is to generate leads, marketing has other auxiliary roles in that it may assist conversions, build trust leads to increase in average sale value but the primary role of marketing is the generation of leads.
What is lead?
A sales lead is the identification of a person or entity that has the interest and authority to purchase a product or service.
Difference between Prospects & Leads
Prospects are the list of all the prospective people who may be interested in your goods and services. For Example a database of all people in industry Leads are a subset of prospects being those prospects who have shown an interest in your products/services company.
Collection of leads
Identifiable and shown interest and need to be able to follow them up. So we are talking about a customer database – CRM system – ideally something like Ontraport which we use – which is a crm system, email sender and marketing automation system all in one.
Effect of Not Enough Leads
Primary problem of most small businesses is not enough leads.
The effect is that they have to convert every lead – have to get every sale.
They therefore have a poor negotiating stance, so they:
- Reduce prices
- Effect average sale value multiplier
- Gross Profit Multiplier
- Take clients don’t like – demanding clients, pay late, not in the direction that you want to go, not buying the service that you want to specialise in.
- Provide terms of payment – extend payment terms from 14 to 30 to 60.
- Customise work when should be systemising and having a standard offer – inefficient operations, difficult to find and train staff, taking more of your time, end up behind schedule and reacting to client demands. Also providing custom work for the standard price.
- Affects thinking in respect of terms of creating lead generation channels:
- Too expensive
- Not converting enough
- Because don’t utilitise lead generation, don’t split test different ads or channels or optimise those channel
- No sales funnel
- Cannot develop automated marketing systems
- Cannot fine tune sales process
- Reactive sales process rather than proactive
- results in pressure on business – cashflow, ability to innovate, time, efficency – affects all 4 other multipliers.
- Halts entire business in its ability to grow
What happens when you have an abundance of leads – constant stream
- No pressure convert every lead – some are not going to be right for your business now but may be later.
- Your negotiating stance is stronger
- increase prices – sales value, gross profit
- Test conversions – try different ideas to convert leads to sales – become innovative in your marketing
- Test and optimise channels
- Systemise service offerings
- Start asking for payment Upfront or reducing payment terms
- More sales
- Rest of the system starts working – more cash, innovate both product and marketing
Back to definition of leads
- Identifiable with decisionmaker who has intent to buy
- You define what leads are
- If define leads to high up the funnel then may focus on wrong area – people who are interested in free download but not buying product. The same applies to competitions – mailing list full of people who go in competitions but actually have little interest in your product or services.
- If leads too high then get massive increase in leads but no conversions like twitter followers or Facebook likes or podcast downloads
- Can add another level of measurement and conversion to prospects and prospect conversion rate
- Converting offer – you can have a number of converting offers
- prospects to leads,
- leads to sales.
- The offer may be different – watch out for whether their intent is different – intent to receive free ebook different to buying service.
Start: Where are leads coming from
- Where is greatest lead source now – networking, direct mail, referrals, advertising
- Is that where you spend time resources, money, manpower?
- What source of leads is converting to sales – is one source of leads convert better to sales
- Look through customer list – where did they come from – is there more there? Could that referrer send more, where could you find more like them.
- Where did you get your most valuable, ideal customers – type of work that you want to do – pay on time
- Cost of those leads in terms of time and money
- Look at what is working now before chasing latest new idea.
- Remember Looking for increase
- Not one big idea but may get it – especially in leads
- 10 x 1% ideas
What is a lead?
Basically whatever you define them as in your business. They could be
- subscribers to your e-mail list
- the number of phone calls
- enquiries from all sources like phone and e-mail website enquiries
- the number of people that walk into your shop.
- number of visitors to website for ecommerce or online business
Leads are people who you have the opportunity to talk to communicate directly to them in some way.
However when you decide is to define leads, they should be would be able to be measured in some way on a regular basis without a great deal of difficulty or ideally recorded automatically.
The first step in defining leads is establishing a benchmark on which you can work from.
It is very common especially in small businesses that leads not measured in any way.
It ends up being a guess and usually overestimated as to the number of leads the business receives.
Without measuring or understanding of how many leads you get and where they come from, you end up running around doing many different things hoping you get some traction on something but not really ever knowing whether a particular channel marketing idea works.
You need to think about also understanding and recording where those leads come from such as website, referrals, advertising, e-mail, walking from the street, special promotion, Facebook, YouTube the list goes on.
So we are looking to increase the number of leads for your business.
Remember in the five multipliers, we just had a 10% increase each year. What you are looking to do is not to one big thing that generates as a 10% increase but do multiple small things that each generate a half percent to 1% increase – direct actionable ideas that you can get finished and applied rather than one big idea that may not work.
You also need to remember that some leads will be more expensive than others as you will be measuring the cost of each generate lead generation channel, which goes to the fourth profit multiplier gross profit.
For example, a radio campaign costing $30,000 may bring in 1000 new leads but that is at a cost of $30 per lead, whilst a referral from existing client costs nothing.
In the first instance we are looking at the low hanging fruit for ideas to increase leads that can be implemented quickly at a low cost.
What are the different ways that you can increase the leads coming into your business by just a small percentage.
The best form of leads are referrals from your existing customers and clients.
These referrals are more likely to buy, they have fewer objections and are further along the sales process, so that is the cost of converting a referral lead is lower.
Often a referral lead just wants to buy – your sales script might be a simple as “How would you like to pay?”
Most businesses rely upon the customers and clients to refer new leads them on their own without any input, suggestion or reward from the business.
So when you’re thinking about building up the leads from referrals consider putting a referral strategy a system in place your business and it’s quite simple.
You can engage and planned the seed for future referrals can actually be done in the sales process itself like “You be so happy with the service that you will want to refer all your friends” or “We expect that all our clients will refer at least 5 people to our business.”
This is the second easy way for your business to get more leads is from e-mail.
E-mail a very powerful and extremely cost-efficient. This strategy works for both the First Profit Multiplier – Leads and the Second Profit Multiplier Conversions.
If you haven’t got an e-mail list already then the first place to start is get all the email addresses for all your past and current customers. Using a email service likeMailchimp, aWeber or Ontraport (which we use) and communicate with them on a regular basis with an informative valuable content that is relevant to them.
One of the great things about email, it that you can use it through email autoresponders to automate your marketing efforts, plus you can fantastic reports as to the effectiveness of your email campaigns.
Today your website should be a major provider of leads to your business.
However a website alone will not bring you any leads without traffic. You need to understand how to drive traffic to your website. A mistake that many people make is that they expect that just having a website will bring them leads.
Websites are fantastic way of building leads to your business especially in the long term but they do require work to build up.
I like to think of a website as a salesman in which you need to provide assistance, support and training to make sure they really work for you.
Is there a community, group or organisation that services, in some way, your target customers. The leads from a networking group could easily provide you with a 1% increase in the number of leads to your business.
Remember we are just looking for many small improvements.
Facebook, Twitter, LinkedIn – in these social media platforms you can target your ideal customers, engage with them.
Which platform that you use will depend upon your business and its customers.
There may be a number of steps between a social media prospect to becoming a lead -> social media to website to contacting you.
Long forgotten these days but still effective. The main problems with direct mail is somethimes the cost and measurement especially when compared to email.
If you are thinking of any direct mail campaigns, read up on “direct response” so that you can benefit from all the decades of knowledge that people have been using direct mail successfully.
I receive very little direct mail these days and most of it is pretty bad and un compelling. One way to approach direct mail – would be to split test headlines through low cost Facebook Ads and use the winning headlines in your direct mail copy.
The old staple of marketing – advertising. When you are thinking of advertising, I want you to forget all about advertising your brand, leave that to Coca Cola, Mercedes and Proctor and Gamble.
Any advertising that you do should answer the following questions:
- What do I want people to do?
- Does the ad have a compelling call to action? and
- How can we measure the effectiveness of the ad.
Using advertising to generate leads could include: Google Adwords, Facebooks ads, local papers, trade magazines, radio, television.
To wrap up:
The biggest problem, is many businesses is that they do not have enough leads. You will probably know if you don’t have enough leads: here are the signs:
- No sales systems
- Customise work rather than standards
- Extending payment terms
- Discounting prices
A abundance of leads will change your business around: more sales, more money, develop systems, employ people.
In future episodes, we will look in detail at leads and different strategies and tactics to develop them.
The One Thing to do for today:
How are you going to measure leads in your business – what is a lead for your business.
Then establish a benchmark – a place to start from.
In the next episode we can going to talk about the 2nd number or growth multiplier being your conversion rate.
Remember you can go to FiveNumbers.com.au to use our online Five numbers calculators to see where you can take your business by just increasing the five numbers. Plus you can subscribe to future episodes.