Articles by Michael O'Hare
“I’ll never buy another lead again,” says a disgruntled sales person after failing to close quickly leads. Being in the lead business, I hear this all the time. Rarely do you hear, “I’ll never advertise again.” Yet, in many cases 99% of the people who see your ad won’t buy your product or your service. (Advertising serves other purposes like branding, but for most small businesses, advertising is to produce sales.)
I once did a consulting job for a company that sold uniforms to Fire and Police depts. Their shtick was to send out catalogs every quarter and hope that 0.25% of those receiving the catalogs bought. Compare that to the Victoria’s Secret catalog that gets 11% of its catalog receivers to purchase. Uniforms are not as sexy as lingerie. But there is a huge gap between 11% and .25%. Even with such a small return on its catalog, this company was profitable.
In the lead business, the standard is raised even higher. A 0.25% response rate on leads does not work because you will typically pay a higher cost for a lead campaign than an advertising campaign. Besides, lead campaigns are a more targeted approach rather than the rapid fire shot gunning of advertising.
A good lead campaign should be bringing the buyer and seller together. A good lead campaign may only close 5% to 25% of the leads purchased. The percentages vary according to the industry. By comparison, on average only 2% to 3% of the clicks in a Google Merchant Cash Advance PPC campaign convert to sales. A reputable lead generation company can provide better averages than Google and in the MCA industry, it can deliver leads at a lower cost. There is real value in purchasing qualified leads.
Where I see most companies make a mistake in purchasing leads is that they focus on price rather than qualitative aspects of the leads. One of the most basic questions to ask is how the lead generation company defines a lead. (Data brokers like to say they are selling leads. Instead they are selling you contacts. Contacts are not leads. Contacts are information.)
A lead is a merchant who is in the market to buy a product or a service and is somewhere along the buying cycle and is willing to discuss purchasing the product or service with vendor(s). The real key phrase is “somewhere along the buying cycle and is willing to discuss with vendor(s).” This implies intent on the part of the merchant. Without intent to purchase, the merchant is simply window shopping.
The second area to focus on when purchasing fresh leads is to find out how the leads are qualified and optimized. Many lead generation companies rely on data scoring to qualify their leads. They simply scrub the leads against a database and those leads that meet a certain score are considered qualified. There is no attempt made to discover the intent of the merchant.
Lead generation is a people to people business. Phone qualification is the best qualifying approach. Phone qualified leads are some of the best optimized leads on the market because a good lead company will make sure that the merchants meet the minimum standards, that they have demonstrated intent to purchase, and that the expectations have been set on what is to happen next. (As can be expected, phone qualified leads offer some of the highest contact ratios as well.)
If you want to close more leads, make sure that the leads you are buying meet the criteria above. If you do, you will see your sales soar.