The Importance of Lead Generation to Business Expansion
Lead generation firms supply your company with the hot leads you need to acquire new clients, while freeing up your time to spend on other tasks, like product development or quality assurance. Conversely, you could double down on new leads, drumming up business in tandem with leads provided by generation firms. Business expansion is directly correlated to finding new clients and making them happy, and the free time gained to reallocate time on these pursuits is what makes lead generation so powerful.
Imagine starting Monday morning with 10 hot sales leads waiting in your inbox. Is there a more productive way to start the work week, in relation to expanding business? Probably not.
Lead generation is not a new form of acquiring business, but business trends and time necessities have found a better way to get new clients. Rather than sitting at a trade show table for hours on end, or setting up a display in hopes that targeted consumers will complete a form, you can have leads generated and sent to you using available technology, all while you can direct your time elsewhere.
Finding leads is time-consuming. Lead generation frees up substantial time, all while retaining the same (if not more) income opportunities.
How Does It Work?
Some agencies specialize in providing qualified leads to businesses. The process of lead generation is actually very easy—but, like most easy things, difficult to do right.
First, an agency develops a website or partners with websites on which they promote and advertise your product or service. A consumer finds these directories or informational sites, then hopefully completes an online quote request form. The buyer's information is verified and matched to the appropriate providers. These matched leads, with full contact information and purchasing requirements, are then sent via email to prospectors and other people potentially in the sales process.
What Business Industries Use Lead Generation?
Lead generation could theoretically work for any business, but firms most often using this type of marketing include insurance agencies, education institutions, real estate brokerages, office suppliers, and furniture stores. Trends show that lead generation will continue to grow, especially for service-oriented businesses.
Why Use This Method?
Lead generation is a win-win for both the buyer and seller. Buyers can request information from several businesses that offer the product or service that they are looking for, then the seller is given the opportunity to make its pitch to people who have given their permission. These are some of the hottest leads. Conversion rates on leads received in this way generally have a much higher success rate than cold contacts.
Lead generation has become popular with businesses because it enables a business to:
- Determine pricing on a per-lead basis
- Choose the product or service they wish to offer
- Select the geographic area in which the business is interested
- Engage in tighter, more effective demographic targeting
- Control the number of leads a business wishes to receive per month, which assists with budgeting)
- Pay only for the leads that are received
How Much Does it Cost?
Lead generation can be extremely cost-effective. Leads range in price and quality, anywhere from $25 to $500 per lead. Pricing is usually dependent on the difficulty in acquiring the lead. The easier to source, the lower the price. Usually, higher-quality leads yield higher conversion rates, thus warranting their inflated price tag.
Agencies that offer lead generation often charge a setup or maintenance fee that can range between $200 and $1,000 per year. You can always attempt to bargain that rate down if you plan on doing substantial business with an agency.
Are There Downfalls to Sourcing Leads with A Firm?
While lead generation can succeed in drumming up business, be wary of disreputable lead agencies that have adopted unethical practices. When you purchase leads, you don't have control over how many providers receive that same lead. You also don't know how accurate the information is.
Some lead agencies sell "junk leads," or leads that contain false or inaccurate information. A lead is really only as good as the lead agency that is selling it. Leads can also get costly, and if you are relying only on lead agencies to provide you leads, this can hit your marketing budget hard.
Using a reputable lead agency to purchase leads can certainly help you grow your business, especially in the startup phase, but don't neglect coming up with a strategy for generating your own leads.
Is Lead Generation Right for You?
If your calendar is empty and you need business fast, you can grow your business quickly through lead generation, albeit at a price. It's somewhat of a gamble, which is why choosing your target demographics with care is vital.
Lead generation can be an easy way to increase your return on investment and greatly expand your client base. Approach it just like you would any other advertising endeavor: set aside a reasonable budget to test it and see if it works for your business. The key to being successful in lead generation is to brush up on your sales and marketing skills so that the leads you receive convert at a high sales rate. Do not try to approach this method of marketing without the ability to follow through and close the sale.
Although building the relationship organically is always better, if you find yourself in want of new business, lead generation can be an exceptional way to profit and expand.