Lead ROI: The Amazing Effects of Lead Nurturing
You may have thought you couldn't afford to buy leads. However, I am going to show you a Lead ROI secret that is going to prove you can't afford NOT to. So often we go into marketing focused on the initial investment with no consideration of the return or the alternative--0 sales! It is time to uncover the secret of Internet Lead ROI...
Reviewing Your Small Business
Let's go through a mini marketing planning session for your small business.
Let's set the perspective of the average small to medium home-based business. Let's assume you are a mortgage broker, realtor, or perhaps a network marketer. You have 10 agents. What do you do today to generate prospects?
If you are the average entrepreneurial small business owner your marketing budget looks something like this:
- $200 for a yellow pages ad
- $200 for a newspaper ad
- $50 here and $50 there for little ad square on the local diner's placement
- $5000 to mail a cheap flyer to anonymous households
These expenditures go out--no trackable results, no phones ringing, and constant panic where the next prospect will come from.
Stop the madness! Build an opt-in database of customers. This strategy will steady your business, in good and bad times. You can create your own opt-in list or jump start the process by purchasing opt-in, real-time, Internet generated customer inquiries.
Select a Quality Lead Provider
If you are going to buy leads these terms are important:
Opt-in: You are simulating a referral. You want to make sure the customer raised their hand and asked for your call. Otherwise, you are in for frustration and potential fines.
Real-time: This is probably your best hedge against Do Not Call and CAN-SPAM violations. Generally, your violating or black hat lead generators are peddling cheap lists.
Internet generated: Again, most lead scams are perpetrated by individuals selling data, lists, and other untraceable sets of customer names and phone number. Direct, real-time, posts from Internet lead generation typically avoids the unscrupulous.
Stop Buying Leads and Start Investing in Clients
If you want to be a success a lead buying you need to commit to two critical shifts in perspective:
- Leads are referrals
- Leads are investments
The first shift will ensure that you follow-up and consider each inquiry with the same respect that you would a referral from your Mom. These are folks are referred to you from the Internet, not your golf buddy, but a referral all the same.
The second shift is from buying leads as a short-term fix to an investment that returns indefinitely. This is the key commonly missed, but let me illustrate this simple principle. The Effects of Lead Nurturing, as I like to call it, is fundamental component of the larger concept of lead management.
Let's review this simple Lead ROI calculator:
With very conservative estimates the return is astounding. Here we use an example of a mortgage broker, but even on smaller margin products the exponential revenue effect holds true. Our starting point has been a small purchase of leads, worked for 14 days, and converting at 2% during that 14 day period. Not bad, nearly doubled your investment with clear profit.
Now let's assume that you continue to work this same set of leads within a lead management system. Your automated processes nurture each lead with a dynamic value-based, education, and benefits campaign for another 3 months. Do you think you might get another 1% of customers saying, "Yes!"?
This is pretty powerful. That little extra automated nudge just doubled your income again!
Now let's watch your investment grow again. Working your customer database for a total of 6 months, and only 1% more...
Nearly $60,000 in profit with only a $12,000 initial investment. This is only the effect of one month, one lead buy--imagine this result layered with a steady monthly lead buys. Then achieving even wilder profits by adding CRM industry studies showing 3% of any client database will, on average, buy each year.
The conclusion is obvious and the math is compelling--Don't Buy Leads, Invest in Building a Client Database!