7 Reasons NOT To Do Lead Gen

As performance advertising increasingly becomes an online standard, there are still many hold-outs who stick to the traditional media only -- or, even worse, cut back on all advertising in honor of the recession.

Maybe you're still resisting lead generation Like any emerging methodology, lead gen does require some focus to get started. But the results are worth it, particularly when economic times make legitimate prospects hard to find.

As we make the rounds of advertisers, there are seven objections we consistently hear. Which ones sound like yours?

I don't have any marketing budget for new programs. The budget issue is real today, but the question you need to ask yourself is whether the budget you do have is doing the job in bringing in new business cost-effectively. If you can see room for improvement -- and almost everyone can -- it is often easy to add a performance element to existing campaigns.

I don't think these programs work. I've tried them before. What have you tried and when did you try it? If for example, a Coreg test didn't yield immediate conversion, that doesn't mean that dedicated lead-gen ads won't. If you tested a single offer rather than a range of informational and economic incentives, it's hard to extrapolate. Bottom line: your competitors are reducing their acquisition costs via CPA and CPL. Why cede that advantage to them?



I don't know how to set up CPL deals. This is a legitimate concern as most media lead with standard CPM deals rather than CPL or cost per acquisition performance partnerships. But if you have an agency, they should be assigned to find these deals and incented to make them happen. If you buy directly, you just need to ask. Online media are certainly more flexible today, and everyone wants incremental revenue.

The other part of setting up CPL or CPA deals is to have target numbers in mind. You likely know what it currently costs to acquire the type of new customer you want. Reduce that number by 20% and give it to willing media as a CPA target. Or divide that number by an estimated conversion rate to back into a CPL goal.

I don't have appropriate creative for lead gen. This is generally an easy one. Lead gen creative tends to work best when in the direct marketing mindset. That means you want to promote the incentive or offer more than the product. Many lead-en firms will provide the guidance for making this happen - or actually execute the creative for you.

I don't have incentives to convince consumers to opt in. What's an incentive? In this new era, it's just as likely to be information as savings. This is particularly the case for complex products and services that require consideration. Informational offers (for example,. a Webinar or a report) are valuable in two other ways: only truly interested prospects will request them, and they provide an opportunity to show your depth of knowledge on the topic.

And the good news about informational incentives: you probably have them already. They may be part of the materials you'd send to any consumer when they ask for more information.

I don't care about leads. I care about closing sales. Probably the comment we've been hearing most frequently since the meltdown. And it is a real issue. Too many marketers have laid off too much staff -- and often that staff included people responsible for converting leads into sales. Some lead-gen companies are now addressing this by adding end-to-end services that both generate qualified leads and complement advertisers' in-house resources on follow up communications and closing strategies.

I don't have the time to work on this. Of course your time is constrained when resources are lean. But it takes surprisingly little time to get started with CPL -- either through direct relationships with media or through specialist lead gen firms. It can be as simple as setting target acquisition numbers, defining your ideal customer and determining appropriate incentives. Good partners can make the rest happen on a turnkey basis.

Have any additional issues with performance that aren't covered in this quick overview? Send me an email and/or reply below on the blog board, and I'd be happy to provide some thoughts. Whatever your view, it's time to get started.

2 comments about "7 Reasons NOT To Do Lead Gen ".
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  1. R.J. Lewis from e-Healthcare Solutions, LLC, May 21, 2009 at 4:50 p.m.

    Interesting post... what are your thoughts on the "shifting responsibility" that comes with moving from CPM to CPA/CPL pricing? Specifically, as a media buy moves from CPM to CPL, the onus of performance shifts almost entirely onto the publisher - in fact so much so, that non-performance (free branding) can be viewed as a positive by the advertiser. In a CPM buy, it seems that all parties are working jointly at the table toward success:
    The Advertiser is responsible for providing a good product at a fair price, The Agency is responsible for supplying good creative and a great user experience, the Publisher is responsible for putting the ads in front of the right audience. As a buy moves towards CPL, suddenly all the responsibilities fall more heavily on the publisher (and a reverse incentive almost begins for the Advertiser... after all if a lead doesn't happen, they don't pay and received free branding). Is this a healthy win-win relationship, or is it just trading on the short-term?

    This point is highlighted in your comment, "Reduce [your current acquisition cost] by 20% and give it to willing media as a CPA target." Even if a publisher subscribed to CPA, why wouldn't you be willing to pay the SAME amount as your current acquisition costs? If you can be more profitable trading marginal profit for scale, why wouldn't you pay MORE? Why 20%? If you succeed do you just move the goal to 50%, 80%... This does not seem to be win-win thinking....

  2. Dennis Yu from, May 21, 2009 at 5:19 p.m.

    How about 3 more reasons?

    My funnel conversion cycle is 18 months long. We have a client in the semiconductor industry that doesn't want to estimate the cost per lead, since the conversion event is so far out and so infrequent.

    I love traditional media. They take our big budgets and also take me out to big sporting events. I've been doing this a long time and it's working-- so why change?

    My agency doesn't understand lead gen. And so neither must I.

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