What is the most expensive and riskiest aspect of business-building? Lead Generation! Of the 5 Ways to Super Profits, this is the one we work on last. Yet, many business owners want to increase the inflow of prospects immediately, wrongfully assuming this will solve all their problems. This is an example of the old adage: ”Be careful what you wish for.” You can generate a boatload of new prospects and then get “bottle-necked” by the limitations of your Team, systems, suppliers, equipment, etc.
Now that I’ve touched on what can go wrong, let’s focus on the importance of lead generation. Remember when we talked about why customers leave? 1% die, 3% move away, and 5% give their business to a friend. That means your marketing should “re-generate” at least 10% of your prospect base annually just to keep up with normal attrition. So, on-going marketing and prospect-building are vital to long-term success. Bear in mind that your database is one of your most valuable business assets. An up-to-date accurate list of contacts with pertinent information is worth real money and the amount varies by industry. In some businesses, the customer list may be the ONLY asset that has any tangible value because of the potential for future revenue/profit. Growing the list of contacts allows for targeted marketing across different demographics and with various campaigns.
The net growth (and this implies that you will clean up the list periodically) of your lead generation (database) is accomplished by your marketing plan. Remember we recommend a 10×10 marketing plan that is tested and measured so that you can make informed decisions about where to best invest your marketing dollars. It’s the failure to consistently test and measure that makes lead generation so risky and, ultimately, expensive. It’s also important to consider the quality of the leads, not just quantity. Generating leads that are not in your target market (absurd example: a lawn maintenance company marketing to a high-rise apartment building!) is a waste of time and money. There are 5 important questions you must ask before you market your business: Who (is the Target Market); Where (will you find them in the highest concentration); What (will you offer them); Why (do they buy and why from you); How (will you get your message to them)? Make sure you ask and answer in the exact order before you embark on your next marketing campaign.