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Updating an Event Marketing Strategy

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updated approaches to event marketingPlanning an upcoming event? While seminars, tradeshows, conventions, and intimate retreats have been around for ages, this doesn’t mean that you can’t update your event marketing strategy to better meet the times. Below are a few modern marketing twists to update your event marketing strategy.

Get Social – Social media is a great tool to use before, during, and after your event. Before the event, you can drum up interest by releasing teasers, interviewing some of your scheduled speakers, issuing time-sensitive discounts, and holding contests. Just before the event, create an event specific hashtag and encourage attendees to use it throughout the event. Not only does this open the door for virtual conversations, your social media followers who couldn’t attend in person can follow along. You can also use hashtags to encourage attendees at live presentations to ask questions. At the end of the presentation, answer some of those questions.

Use QR Codes – QR codes are those quirky little squares you see in magazines, newspapers, and occasionally, on products. Using either a Web or smartphone app, you can create your own custom QR codes. When someone scans the code with a smartphone, your message – whatever it may be – will appear. Use QR codes to play a video, send attendees to a specific URL, giveaway a special report, encourage users to “like” you on Facebook, and more. QR codes can be printed and placed on virtually anything including signs and promotional items. You could even have a QR code embroidered on your shirt if you wanted.

Create a Cozy Space for Attendees to Power Nap or Power Up – Have you ever noticed that some of the most popular booths at trade shows have hammocks or chairs? While you may not be in the hammock or chair selling business, it’s not a bad idea to create a comfy space for attendees to get off their feet and relax for a few minutes. While you’re at it, consider making power outlets available for attendees to plug in their mobile devices for a quick charge.

Use Email Judiciously – It’s easy to go overboard with event-related email messages. Obviously, you’ll want to send targeted emails to people you think could benefit from attending your event. Likewise, you’ll want to send a confirmation email after someone registers to attend. You may want to send a reminder a few days before or share hotel information. However, there’s a fine line between being informative and being spammy. Try not to cross that line.

Use Streaming Video – While it’s not fair to paying attendees to broadcast the event to a wide audience for free, you could use streaming video to broadcast selected events to people who could not attend in person. Alternately, you could offer a “virtual” attendance package for a price, again limiting access so that the virtual package isn’t so attractive that it prevents people from attending in person.

Use Recorded Videos – Similarly, you could sell videos of some of the presentations after the fact. Again, be sensitive to your paying audience so that they feel that their physical attendance was the best possible value. For example, you could add value to your live audience by offering exclusive access to videos after-the-fact for free (or for a nominal fee) while charging non-attendees a premium per video.

Choose Speakers Your Audience Wants to Hear – Just as with other marketing methods, it’s crucial to match content with your audience. This means you absolutely need to know your audience. Create personas, hold focus groups, survey your customers, and use other methods to gain a deeper understanding of your audience’s interests.

Despite dramatic changes in marketing, event marketing is alive and well. Use these tips to modernize your event marketing strategy.

What is Inbound Marketing?

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eBook_ToolBox_CTA_WebInbound marketing is much more than the latest buzzword to hit the marketing world. It’s a philosophy, a strategy, and a discipline – and it works. Here’s a look at what inbound marketing is and how you can benefit from adopting it.

Inbound Marketing as a Philosophy
Inbound marketing endeavors to turn complete strangers into visitors who visit your website or physical location. You don’t just want them to look around and leave, do you? No, you want to convert them into paying customers. But why stop there? The inbound marketing philosophy isn’t about turning a quick profit, it’s about attraction, conversion, and advocacy. You want your marketing efforts to be so spot on, your products to be absolutely perfect, and the customer experience to be so wonderful that your customers will turn into cheerleaders for your brand. Once that magic moment happens, they attract even more visitors to your site or store where the cycle repeats itself.

Inbound Marketing as a Strategy
With inbound marketing, you must recognize the various stages that customers go through as they make their buying decisions and nurture them through these stages accordingly. Your marketing approach must match their current stage in this lifecycle.

Inbound marketing is also highly personalized, and it takes place across multiple channels. Implementing inbound marketing often involves branching out to new channels such as Facebook, Twitter, YouTube, or private forums. You need to find out where your ideal audience hangs out and start hanging out there too. This allows you to get a deeper understanding of your ideal customers’ needs and problems which is essential to later tailoring your marketing messages. It also comes into play later when it comes time to interact with prospects and customers across multiple channels. After all, today’s consumers don’t necessarily want to communicate using call centers. They expect to be able to interact on social media sites.

By recognizing the various stages customers go through, identifying your ideal customers, and creating multiple channels to reach them, you can create an inbound marketing strategy that turns strangers into visitors, into customers, into cheerleaders.

Inbound Marketing as a Discipline
As you can imagine, this doesn’t happen without discipline. It requires a different approach than you may be used to. You may be accustomed to buying ads and broadcasting your message to the masses. With inbound marketing, there’s less pushing and more pulling; less shouting and more listening; it’s less about you and more about them. Rather than buying ads and blasting your message to a wide audience, inbound marketing involves identifying your ideal audience and creating and sharing relevant content that resonates with their needs, problems, and desires.

The steps involved in inbound marketing include:Inbound Marketing diagram

  • Attracting your ideal customers – Your website needs visitors before you can possibly make a sale. Use blogs, social media, relevant keywords, and landing pages to attract the right people to your website.
  • Converting them into leads so that you can nurture them into customers – As visitors look around, some may be ready to make a purchase. However, most aren’t ready at this point. After all, you’re complete strangers so why should they trust you? Use calls-to-action and forms to prompt visitors to sign up for a newsletter or download a special report. Once you capture their contact information, you can then engage and nurture them through the sales process.
  • Closing the deal – Using email campaigns, online video, and other inbound marketing techniques, you will provide your leads with relevant, useful information that matches their stage in the process. This sets you up as a trusted expert and positions your solution as the ideal one.
  • Wowing your customers with a fabulous experience – Finally, wow your customers with a fabulous experience from start to finish and you’ll soon have an army of advocates working on your behalf.

Ad-Free TV Could Be in the Works

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Apple LogoThough the details are fuzzy, it appears that Apple is working on ad-free TV. According to a recent report by Jessica Lessin, a technology journalist for the Wall Street Journal, posted on her own website, Apple has been in negotiations with TV networks and cable companies. Apple apparently wants to offer a premium service that allows subscribers to skip ads for a fee. A portion of this fee would reimburse the networks and cable companies for the lost advertising revenue. Premium subscribers would access the content via a set-top Apple device.

Who wouldn’t want ad-free TV? The DVR and streaming video services such as Netflix, Hulu Plus, and Amazon Prime have made skipping commercials a reality for many viewers. They, too, charge a premium for the service. For example, most cable companies charge a monthly fee for DVR service as well as lease digital video recorders. Streaming video service providers also charge a monthly fee for the service.

However, both of these options introduce a delay in programming, albeit a short one. With a DVR, the user can watch and pause live TV, but you cannot skip a commercial in real-time if you haven’t given the DVR sufficient time to record the broadcast. Popular television shows aren’t generally made available on streaming sites until the next day – sometimes even the next season.

Apple’s appears poised to change this. It recently obtained a patent that covers swapping alternative video streaming content where commercial breaks normally appear.

What Ad-Free TV Means to Viewers
Over the years, television went from free programming from a handful of networks offering television shows with one or two sponsors to paid cable bundles with hundreds of channels. Though viewers pay their cable companies, commercials remain – and they’re a major presence. For example, according to TNS Media Intelligence, 60 minutes of prime time television programming contained about 22 minutes of commercials (roughly 36 percent) in 2008. Late night programming was even worse with over 29 minutes per hour (49 percent) containing commercial messages.

From the television audience’s perspective, ad-free TV is likely to be welcomed though not all viewers will be willing to pay for it. After all, they’re likely already paying for cable, DVR service, and possibly a streaming video account or two. Many Apple TV and other smart TV users have invested in smart TV devices with the intention of cutting their television costs.

What Ad-Free TV Means to Marketers
While it remains to be seen if Apple will introduce ad-free TV, and if consumers will bite, the marketing industry has reason to worry. Apple is a trendsetter, so if it succeeds here other companies may follow and TV as we know it could be completely reinvented.

That said, few in the television industry are unaware of the effect that the DVR has had on television viewing (and ad viewing) habits. Advertisers know it too. Their expensive ads are not getting the eyeballs they got in the past, forcing advertisers to find more effective places to spend their advertising dollars.

Will Ad-Free TV Become the Next Reality?
Only time will tell if Apple can pull this one off. If it does, advertisers may be able to obtain better rates due to a decrease in viewers and, potentially, an absence of other advertisers. Some consumers will willingly pay for ad-free TV while others will opt for free, harkening back to the old days when “sponsors” paid for programming.

Is Your Marketing Knowledge Too Old-Fashioned?

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Old fashioned marketingIf you graduated with a marketing degree more than a few years ago, your expertise remains valuable but it could be starting to show its age. As you know, the world has become more connected, more social, and more instantaneous. Consumers have different expectations than they did before the era of instant communication. As such, classic marketing techniques have changed – have you kept up with the times?

Let’s use the common press release as an example. In the past, press releases were written for journalists; they were a means of convincing journalists to share their stories with their readers. While marketers continue to send press releases to newspaper reporters and broadcasters, they have switched gears. Today, instead of crafting press releases for news organizations, marketers write them with a much broader market in mind: customers and prospects. In addition, these press releases are posted on company webpages, blogs, social media sites, and press release distribution sites.

Another shift has to do with graphic design. It’s no longer enough to create a logo and color scheme and use them consistently. All interactions across all channels should be branded; they should be highly visual and engaging. They should be easy to digest and understand. The keyword here is unified messaging. While larger companies have graphic design teams that largely handle the design and user experience, marketers today must be knowledgeable about both visual design and usability concepts as they tend to be more involved in the process than they have been in the past.

Content marketing has emerged as a major force in the digital era. The days of spending months planning a single 30-second television advertisement are becoming relics of the past. Today, marketers must create heaps of content including everything from traditional advertisements to blog posts, online videos, special reports, articles, social media posts, eBooks, white papers, and more. Not only that, these materials are highly interactive, requiring marketers to respond to comments and questions posted by readers.

In addition, analytical tools allow marketers to gauge the response to their materials in real time. Split testing and data from past campaigns are used to fine-tune future content generation efforts. In order to best meet the needs of the target audience and align with corporate goals, marketers must ensure that their efforts are both well-received and effective, and metrics and analytics play a crucial role.

Older outbound marketing techniques often centered around seasonal campaigns. For example, linens and towels and other “white sale” items were traditionally heavily promoted in January while outdoor furniture and grills typically go on sale in the summer months. Meanwhile, while seasons still affect purchases to some extent, marketing cycles aren’t as prominent as they once were – and the consumers largely ignore them. The advent of the DVR means that viewers regularly skip commercials.

At the same time, they use other channels to actively research products and services relevant to them. With outbound marketing, companies used to push what they thought consumers needed at the time; with inbound marketing, consumers seek their own information about products and services that matter to them.

Thus, if your marketing education has not evolved to accommodate the numerous changes that have taken place over the last few years, your marketing techniques may be a little too old-fashioned for today’s consumers. Instead of pushing messages to journalists in an attempt to win their favor and create buzz, consider adopting a modern inbound marketing approach that attracts the right consumers to your marketing materials and then engages, nurtures, and converts them.

5 Negative Marketing Techniques to Make a Positive Impact

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You work long and hard crafting “feel good” ad campaigns with positive messages. However, a little negativity can be a good thing when used judiciously. Below are five ways to channel your inner grumpiness when marketing your business.

1. Identify the customers you DON’T want. While you likely focus on attracting the right type of customers, it is equally important to know which customers you do not want. In some cases it’s a simple matter of a mismatch between needs – or lack thereof – and your solutions. In others, certain personas may be too costly to acquire or prone to high churn rates. Some audience segments may be unprofitable. Whatever the reason, it’s important to be aware of the types of customers you do not want so that you can avoid inadvertently marketing to them.

2. Be controversial. Nothing gets people buzzing like a little controversy. However, you’ll need to be prepared to manage the conversation – and the emotions that are sure to arise. Controversy doesn’t need to be of a serious nature such as politics or religion; it can be much lighter such as “Coke vs. Pepsi.” Before you begin, consider what position, if any, you will take. It’s fine not to take a side and serve as the moderator of any discussion that occurs. Obviously, if you work for Coca-Cola, your position would be that Coke is better than Pepsi. Similarly, if you work for Pepsi your position would be that Pepsi is better than Coke. However, what if you’re a distributor who sells both products to restaurants? You might opt to stay neutral and let your customers share their likes and dislikes about the two products. Choose a topic related to your brand that people are passionate about. When handled correctly, this negative marketing tactic can generate buzz and traffic.

3. Create a shared negative experience. People tend to dislike many of the same things: sitting in traffic, endless office meetings with no purpose, obnoxious people talking loudly on cell phones in confined environments, being treated rudely, and so on. Sharing a negative experience that your audience can relate to can build rapport and engagement. Be careful to transition back to a positive solution and avoid a full blown rant.

4. Explain why something sucks. This can quickly establish yourself as an authority on a topic, especially if you can effectively make your case. Detailing why something sucks also provides you with the opportunity to position your product or service as an alternative. For example, if you sell beauty products with all natural ingredients, you could write about beauty products that suck because they contain chemicals, are tested on animals, use environmentally damaging manufacturing processes, and so on. From there, you could frame your products as alternatives that do not suck.

5. Use negative titles occasionally. Lists are popular with bloggers and readers alike. For example, a blog post titled “Top 10 Gadgets for Busy Moms” would likely get a lot of clicks. The same is true of a blog post titled “Don’t Waste Your Money on these Ridiculous Gadgets.” This is similar to negative marketing tactic #4 in that you’ll likely go on to detail why those gadgets suck.

A little negative marketing can have a positive impact on your overall marketing strategy. Use negative marketing to identify who you don’t want to attract, stir up passions, bond with your audience, position yourself as an authority, and boost traffic. When used with care and in small doses, negative marketing can be extremely effective.

Optimizing LinkedIn for Business and Marketing

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LinkedIn logo social media iconLinkedIn is a powerful social network embraced by business professionals around the world. Not only is it a great place to network with others, LinkedIn is the perfect environment for growing your business. LinkedIn recently updated its Company Page feature, allowing businesses to make a more profound impact. Below are a few ways that you can optimize your LinkedIn page for business and marketing purposes.

• Upload a cover image – Largely aesthetic, having an attractive cover image plays an important role in forming that first impression. Make sure your cover image is professional, attractive, and properly displayed.

• Post relevant company-oriented status updates – While your personal LinkedIn profile is all about you connecting with other business professionals, your company LinkedIn page is all about your company.

• Target your status updates – Did you know that you can send your status updates to a specific demographic? Rather than trying to be everything to everyone, you can target your updates to a specific set of LinkedIn users based on criteria such as industry, job role, location, or company size. For example, if your ideal customer is a human resources manager in Georgia who works for a company with 1,000 or more employees, you could set your status updates to appear only in the feeds of human resources managers in Georgia currently working for a company with over 1,000 employees.

• Target your products and services page – Just as you can target your status updates, you can do the same with your products and services page on LinkedIn. This is a powerful option that allows you to have different versions for different audiences. For example, HR managers in Georgia might see a different version of your page than payroll processors in New York. After all, these are different audiences with different needs – and you have different products and services to offer each one! This is one of the most exciting tools available on LinkedIn – or any social platform for that matter.

• Get involved in LinkedIn Answers – This tool allows you to ask and answer questions, both of which can help you build your business. Asking questions is a great way to perform research or gauge potential reactions to a new product or service while answering questions can position you as an authority in your field.

• Make your page interactive and engaging – Consider adding an online video (hosted on YouTube) about your company or use apps specifically designed for LinkedIn. For example, you could use a WordPress app to add your blog’s posts to your LinkedIn page automatically.

• Use LinkedIn to generate leads – Sprinkle offers into your company status updates with calls to action and you may find that your LinkedIn page is a valuable lead generation source. Just as you promote and share links to your landing pages elsewhere, you’ll want to do the same on LinkedIn where you’ve already established your credibility and started forming relationships with people in your desired demographic.

• Consider using LinkedIn’s ads – Much cheaper than Google advertising, LinkedIn’s ad program is also highly targeted. Simply craft your ad, hone in on the right type of people, and get noticed.

LinkedIn’s company page feature is an often underutilized tool for marketing your business and making personal connections with your target audience. Not only can you send targeted advertisements on LinkedIn for much less than traditional advertising channels, you can tailor your content to match various audiences.

Purchasing Email Lists – A Seriously Bad Idea

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emailA quick Internet search will show you that, yes, you can buy virtually anything online including email lists. In fact, you can buy a list containing thousands of email addresses of consumers in just about any demographic you’d like. Imagine having a huge list of email addresses that you can mail to right away. It’s tempting, isn’t? As attractive as it may sound, purchasing email lists is a seriously bad idea for several reasons. Let’s take a look.

As you likely know, there are three common ways to build an email list: generating a list on your own, buying a list of email addresses, or renting a list of leads. Each has its pitfalls. For example, it’s time-consuming to build your own list. It often means attending trade-shows, asking customers to sign up, or building an advertising campaign and opt-in incentive program. Renting lists requires working with a third party provider who owns the list and keeps the addresses hidden.

Buying lists is by far the fastest choice, but it also has the most pitfalls. List sellers often claim that their lists are filled with contacts who have opted-in to receive email messages. However, what’s unclear is how long ago and from whom? You can bet that they didn’t consciously agree to receive random email messages from marketers like you. Many people on purchased lists will be tempted to report your messages as spam – and many will because your messages arrive without their actual consent. Even if you are not concerned about the implications of the CAN-SPAM Act, you should be concerned about sending messages to people who are not interested, who did not request contact from you, and who are weary of having their contact information sold to one marketer after another.

Another problem with buying email lists is that most email marketing vendors such as Constant Contact, Mail Chimp, and Aweber strictly prohibit the use of purchased email lists. They WILL notice and they will not allow you to send email messages to these lists using their service. If you’re tempted to work around that by choosing a less picky vendor, be aware that email service providers that are not careful are often blacklisted by Internet service providers. A single spammer using such as service could affect the entire service. Thus, even legitimate messages sent through blacklisted providers will never arrive in recipients’ inboxes.

Even if your messages go through and land in your purchased targets’ inboxes and do not get marked as spam, you have another huge hurdle to overcome: these contacts don’t know you nor are they necessarily interested in your offer. They are cold and unqualified. For example, let’s say you’ve purchased a list of mortgage leads. These people may have expressed an interest in acquiring a new mortgage six months ago and opted into a list. Some will have refinanced between then and now and are no longer in the market. Others will have lost interest. Others will be sick of receiving an endless barrage of mortgage-related materials. How do you think your message, no matter how elegantly crafted, will be perceived?

Finally, your reputation could be seriously harmed if you buy email lists. Companies specialize in identifying spammy behaviors and spammers. Much of this is automated using software that identifies messages being sent to out-of-date mailboxes. If you’re identified as a spammer, not only will your messages not be delivered, your IP address could be blacklisted simply for sending a blast of emails to obsolete email accounts.

We know it’s tempting to take shortcuts, but buying an email list is a seriously bad idea. Don’t do it!

Marketing Metrics Makeover

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marketing metrics
A few weeks ago we discussed marketing metrics that impress your boss: customer acquisition costs, the marketing percentage of customer acquisition costs, length of time to recoup those costs, customer lifetime value, number of customers marketing has acquired, and the number of customers nurtured by marketing. While presenting these metrics to your boss is sure to impress, what happens if the actual numbers are disappointing? Once you have benchmarks in place, give your marketing metrics a makeover by improving them. Here’s how to fix disappointing metrics.

      • Customer Acquisition Costs – Does it cost too much to acquire a new customer? Look at the sales cycle to see if you can shorten or streamline it. Work with the sales team to define the criteria for qualified leads, examine marketing campaigns to identify those that have the highest return on investment, and focus on using higher ROI campaigns to reach the most targeted, qualified prospects.
      • The Marketing Percentage of Customer Acquisition Costs – If the percentage of your marketing budget that goes toward customer acquisition costs has gone up, that’s a signal that it’s time to reevaluate your strategy. Again work with sales to ensure a cohesive approach. Examine conversion rates, look for areas of underperformance, and find ways to qualify leads more efficiently.
      • Length of Time Required to Recoup Customer Acquisition Costs – Does it take an excessive amount of time before customers become profitable? A three-pronged approach can shorten this timeframe. Start by revisiting your pricing structure, possibly requiring higher payments upfront in order to become profitable sooner. Next, maximize the value of each customer by identifying upselling and cross-selling opportunities. Finally, evaluate the nurturing and sales process to find ways to shorten it which reduces acquisition costs in the first place.
      • Customer Lifetime Value (CLV) – This is related to the above, but it also stands alone. Again, you will need to evaluate your sales cycle and acquisition costs in an effort to reduce those. Finding additional opportunities can also increase CLV. In addition, reducing “churn” should also be prioritized. Churn refers to customers who are dissatisfied and leave your business. Evaluate product quality, customer service, renewal processes, and other areas that affect churn and address areas that need improvement. By reducing turnover, you can increase the number of profitable customers and increase CLV as a whole for each segment of customers.
      • Number of Customers Directly Acquired by Marketing – If the number of customers directly acquired by marketing has gone down significantly, reevaluate your lead management process. Are leads being nurtured properly? Are they being given the right information at the right time in the sales and nurturing cycle? While it’s tempting to buy more leads, it’s not helpful if your lead management system isn’t working to move them through the funnel toward a favorable buying decision.
      • Number of Customers Nurtured by Marketing – This metric involves the number of customers that the marketing department has assisted. If this metric goes down, it means that marketing is becoming less involved in the process once a lead has been turned over to sales. It’s smart for sales and marketing to work together to nurture leads, not as separate entities. It may be time to realign sales and marketing to ensure that leads are both generated and nurtured efficiently.

As with most performance measures, these marketing metrics will fluctuate. When the metrics above change suddenly or dramatically, it could be a red flag that needs your attention. Even without dramatic changes, you may want to work on improving each of these metrics to ensure a shorter customer acquisition cycle and a faster time to become profitable.

Social Media Marketing Myths

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Social media platformsNo doubt, social media marketing is hot. It is also confusing thanks to multiple social media outlets, changing SEO strategies, and conflicting advice from dozens of self-proclaimed social media gurus. To help you break through the confusion, we’ve busted the following social media marketing myths:

  • You need a presence on ALL social media sites – BUSTED. There are far too many social networks to effectively leverage all of them. Plus, each social network serves a specific purpose, so some may not be appropriate for your business. Go where your best customers hang out, and start there. The big three are: Twitter, Facebook, and LinkedIn.
  • Email is obsolete – BUSTED. There’s a saying in the Internet marketing world, “decisions are made in the inbox.” Building a list should remain a top priority. Your prospects may hang out on, and generally prefer, Facebook or Twitter, but they still use email.
  • Automation is the key to success – BUSTED. In theory, automating all of your tweets and updates sounds smart and efficient. In reality, your followers will see right through your attempts and perceive you as robotic, fake, or uncaring. Remember, social media is social. Robots cannot converse nor can they fake sincere interactions. Some automation is helpful. For example, you can set up automatic updates whenever you publish a new blog posts; however, make sure to be interact as people comment and ask questions. While you’re at it, avoid the temptation to blast each post to every single social media site you’re on. Each platform has its content preferences – and your prospects may be following you on several sites.
  • Your prospects aren’t using social media – BUSTED. While recent research shows that the majority of adults spend time on social media. Whether your customers are teens or great-grandparents, chances are good that a large percent of them are using social media. In addition, people close to them such as parents or adult children are also influenced by companies on social media sites.
  • Social media is free – BUSTED. Watching TV using rabbit ear antennas is free too, but producing and broadcasting ads isn’t. Even if you don’t run ad campaigns on your social media sites, you or your employees will spend a great amount of time interacting with followers. In addition to the human resources costs, it often makes sense to invest in social media management software and analytical tools.
  • Social media for business should focus only on the business and its achievements – BUSTED. If your social media accounts are used strictly for patting yourself on the back and telling the world how wonderful your products and services are, none of your followers will stick around. Remember, people want to know, “What’s in it for me?” The more you can make your posts relevant to your customers’ problems, challenges, and concerns, the more engaging your social media efforts will be.
  • Create a profile and fans will flock to you – BUSTED. If you build it, they may or may not find it. Make sure to let your customers and prospects know where to find you. Whether you wrap all of your company cars with your Facebook info, use QR codes, hand out fliers, include social media buttons on your website, or purchase “get more likes” ads, you must let people know your social media sites exist. Take it even further and give them a compelling reason to like or follow your company.

Social media continues to evolve and is no longer considered “new.” Now that it’s been around for several years, myths are being challenged – and busted.

Lead Generation: Tips for Balancing Costs and Quality

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balance cost and value

 

Have you ever been excited to find a cheap source of leads only to be disappointed by low conversion rates? Have you ever paid more than you felt comfortable with for higher quality leads? Have you ever paid way too much for poor quality leads? When it comes to lead generation, lead quality is often closely related to cost. However, cost per lead is not the only part of the equation. It is essential to understand how your lead sources and lead generation efforts pay off. If you don’t look beyond cost per lead and examine your return on investment, you could find yourself making the same mistakes time and time again.

First, no matter where you source your leads, make sure to know your numbers. You should know:

  • Cost per lead
  • Conversion rate
  • Average profit per conversion
  • Profit per lead

For example, if you buy 100 leads for $100, your cost per lead is $1. If your conversion rate is 5 percent with an average profit per conversion of $50, 100 leads will generate $250. This would put your profit per lead at $2.50. Once you know your profit per lead, you can compare that to your cost per lead and decide if it makes sense to continue using this particular lead generation method. Before you abandon a lead source completely, consider if it’s possible to increase either the conversion rate or average profit per conversion.

In addition to looking at the numbers, consider how much a good lead is worth to you. If you sell expensive products such as real estate or industrial equipment, a single high quality lead could cost hundreds or thousands of dollars but the potential payoff could be well worth your money. In contrast, if you sell inexpensive products, it doesn’t make sense to spend more than a few pennies per lead.

Another factor to look at involves where your leads are in the sales cycle. Are they simply gathering information or are they ready to buy? It’s smart to look at the source of these leads as well. Where did they come from? For example, if your leads signed up to enter a chance to win a vacation to Hawaii at the local home and garden show, they’re not necessarily interested in buying a new hot tub, refinancing a loan, or having their kitchen remodeled. Thus, these leads will be less likely to convert than leads who filled in an online request form for a quote on a new hot tub, loan, or kitchen cabinets.

Finally, high quality leads tend to be highly targeted leads. Whether you are generating leads on your own website or buying them from a vendor, the better targeted your leads, the more successful you will be at converting them. This may require optimizing your landing page and advertisements to attract the right people or working with your lead vendor to filter your leads.

For example, if you are a mortgage broker who specializes in reverse mortgages in a particular city, ask your lead vendor to provide you only with leads who want a reverse mortgage in specific ZIP codes. This allows you to get more of the leads you want without increasing your costs.

Lead generation is an art form in its own right. Know your numbers and find ways to increase your chances for success. Take both an objective and subjective look at all of your lead sources and determine which sources deliver the most targeted leads and the best overall value.