The first common mistake regarding lead generation is caused by thinking that it is necessary to generate enough leads to keep busy. We suggest re-aiming your approach to generating enough of the right leads to support your margin and profit targets. The process and the reward of each approach are very different.
The first approach results in mostly reactive leads. Reactive leads are leads that are not necessarily a fit for your business. Reactive leads come from Word-of-Mouth, Referrals, Online Lead Generation services, and undifferentiated websites. Leads like this may not be what you want or need. And leads like this have a low hit rate of matching what is special about what you offer with what the potential customer cares about; wasting their time and a lot of your time.
Targeted leads are different. Targeted leads match what is different or special about you, with people looking for that difference. All marketing strategies require you to feature something that is special about you. This is called your Value Proposition. If you haven’t identified and promoted a strong value prop, then the default becomes your value prop — and that is price.
Reactive leads naturally skew toward price-priority customers. A steady diet of reactive leads will surely convince any contractor that their whole market is about price, and they dare not charge fairly. Word of mouth and referrals are valuable, of course – but they should not constitute more than half of your total lead generation. The other half must come from targeted leads.
Generating targeted leads requires a different process. It isn’t that it’s hard or costly, but it does require some marketing knowledge to create the targeted lead-generating processes. Once accomplished, it can be life-changing. In a reactive lead generation approach, only fewer than half of the leads will be from the clients you want. And of those that you want only about a quarter of them are looking for your unique value prop. With an effective program churning out targeted leads, you can end up with about 70% of your sales calls being with qualified leads who care about what is special about your company. It answers the question in advance as to why a customer should choose you over others and be willing to pay a premium to get what is special about you.
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