Why Your Lead Gen Isn't Working
Tough economic times and slashed budgets have accelerated advertisers' interest in accountability. And online lead generation has been accountability's poster child. So as with so many technology-driven ad applications, advertisers have rushed into lead gen, often getting disappointing returns -- just like early days of banners, email and search.
It seems so simple to build that ROI by only communicating with consumers who want to hear from you. It is easy if you know who you want to reach, what success costs and what to say to a range of possible audiences.
When we discuss a CPL campaign with a potential advertiser, we set up a dialogue to help determine whether that advertiser should be doing lead gen at all -- and if so, which potential customers they should be targeting. Here are some of the questions advertisers should ask themselves and their lead-gen providers:
- What is our real cost of acquiring a new customer today? This is your benchmark for all lead gen programs. If you can't reduce or at least match current acquisition cost, CPL may not be right. We often use a rule of thumb that says the cost of a qualified lead should be no more than 3% to 5% of target acquisition cost. Unrealistic conversion assumptions mean weak returns.
- Which segments can we target? For most marketers, lead gen makes sense for some segments, but not all. Can you identify your highest value potential customers? Maybe they're heavy users of the category. Maybe they use a competitor's product and are dissatisfied. The best lead-gen programs enable you to target only these niche audiences.
- And what should we offer them? Think about your ideal new customer walking into your office. What does he or she need to know about to get them to trade valuable contact information for your product or category information (or a financial incentive)? And then, what does it take to convert them to being a buyer? Be sure your message and offer are topical and timely -- or you won't break through the clutter enough to make a difference. In today's economy, there is no business as usual.
- Have we tested enough? Dynamic changes in the marketplace and competitive messages mean you should constantly test and fine-tune the offers and language that will foster a consumer to opt in.
- Are we set up to customize? Once you collect information and segment the responses, can you target your messages cost-effectively? To begin, are your copy and offers tailored to match the segments? Too often, we see carefully segmented leads being sent the same "one size fits all" creative.
- Are we able to follow up? Generating the lead is a great starting point, but it simply does not close the sale. That requires follow-up: human, email or postal. If you don't have outbound telemarketing and customizable email capability, be sure your lead-gen provider does. Our experience shows a 2x to 3x improvement in conversion through basic direct marketing continuity. Of course, the follow-up should be as relevant and timely as the initial offer.
- If it's not working, should we give up? Lead gen is a learning process. Whether you try it on your own or leverage the knowledge of lead-gen specialists, you'll get better as you get more experience.
If you can answer these questions based on your company's abilities and needs, online lead gen may become your most profitable way to acquire new business.