I recently had a meeting with a client who owns a small, but growing business. After a couple of years of trying various online and offline marketing strategies, he had begun to see a huge growth in leads. The leads were coming from all angles: website form fills, email, referrals, phone calls and in-person networking.
This sounds awesome, right?
Actually, no. He told me he was spending most of his day sorting through the leads to determine which were qualified and which were not. Then he had to follow up and develop business proposals and estimates for all. He was swimming in leads and it was preventing him from managing and growing other aspects of his business.
This wasn’t the first time I’ve heard this. Business owners think generating leads is a good thing, and yes, lead generation is critical to building a successful business. However, there are times when generating a lot of leads is actually bad for your business. Let me explain…
1. Quantity vs Quality
It should come as no surprise that lead quantity doesn’t necessarily guarantee quality. You spend time (and therefore money) sifting through these leads to determine which ones are legitimate and qualified, then you have to nurture them. Inevitably, your lead to sale conversion rate will suffer because some of the leads you’re nurturing are essentially garbage.
Here are some causes of high quantity, low quality leads:
- You’ve gone too broad with your targeting
- Poor keyword selection
- Pay-per-click (PPC) is not targeting your buyer personas correctly
- You are offering a free trial or discounted offer which generates leads who never intend on becoming a paying customer
- Rather than creating a strategy, you’ve just implemented a bunch of tactics. Your eggs are in too many baskets and they are getting full!
What’s the solution? Stop, outline a strategy and be sure it includes refined keywords and targeting. Casting a smaller net towards a defined target market will not only help you produce higher quality leads, you will also save time and money.
2. Cost of customer acquisition is too high
Digital marketing is highly measurable, so if your marketing dollars aren’t providing the best return on your investment, those numbers will be staring you in the face. One key measurement to pay attention to is your customer acquisition cost. How much money did you have to spend to generate a new customer? If the cost of customer acquisition is too high, then you could potentially be losing money on each sale.
The solution in this case: start by reviewing your cost per click and landing page conversion rates. If you use Google Analytics and have conversion goals set, you can review the reports to determine these numbers. Rather than stop what you’re doing entirely, try an A/B test on the high cost, low conversion activities. This is simple to implement and will allow you to see if a refined message, improved landing page, different offer, or even just a different image or video on your landing page would improve conversion rates and ultimately minimize your customer acquisition cost.
3. Producing a large quantity of high quality leads but not having the infrastructure to handle the inquiries
Let’s say you’re doing lead generation the right way. You’ve invested in digital marketing, you’ve got a solid strategy, you’ve mastered your niche and targeting, and the qualified leads are rolling in. They’re piling up in your inbox and they look great in there…but you don’t have the infrastructure in place to track or nurture these leads. The result: they go unanswered or get lost in the mix and your competitor reaps the rewards of your lack of infrastructure.
Here’s a solution that many businesses are embracing and it’s saving them a ton of time, money and staffing resources: marketing automation. In today’s competitive market where most leads are coming in online, you must have a customer relationship management (CRM) system integrated with marketing automation software, such as Active Campaign. The beauty of marketing automation software is that it works while you sleep. It does 90 percent of your work, 24 hours a day, seven days a week. The online leads come in, they are added to your CRM, and then those leads are sent triggered, automated email follow-ups based on the automation logic that you’ve created. When the automated campaign has effectively nurtured the lead and determined that its qualified, you or your sales team will then connect personally with the lead to make the closing process easier.
4. Generating too many leads and closing so many deals that your company doesn’t have the infrastructure to service them
If you’re doing everything right and managing your leads effectively, it’s possible you’ve generated more work than you can handle. You’re working crazy hours, you’ve overburdened your staff and guess what starts to slip? Customer service. If you aren’t managing the expectations of your current customers your reputation will suffer and you will not generate referrals or repeat business.
The solution: create a plan to manage your growing business more effectively. This could include hiring staff, outsourcing work to an agency or consultant, or both. If you are going to commit to a level of excellent service, you need to meet your deadlines or else you may end up ruining your reputation and destroying all the hard work you’ve done to get to where you are.
Are you experiencing any of these issues? At 44 North, we specialize in helping businesses generate high quality leads in a cost effective manner by implementing systems that help you manage the complexity of nurturing and servicing these leads. Get in touch to learn how we can help.