Generating leads and new business is the primary reason why marketing exists. Over the years, marketing has evolved and companies have become increasingly aware of the results. We know that all leads aren’t of equal value to your business, yet there is a fallacy among many marketers in this industry regarding advisor and agent leads and the measurement of cost per lead . All too often I hear companies say that the CPL is the primary measurement and driver of how their companies’ marketing dollars are spent.
If all leads were equal this would be a correct way to measure, but unfortunately that’s not the case. Anyone can create a lead, it’s easy to create an offer and buy a list, but when you are generating responses — how qualified are they? Did you simply get an email address or did you require more information? Such as an address, type of products they sell, amount of production, etc. And most important — are they even qualified to do business with you?
To master the game of marketing and achieve exponential growth, you have to master the game of lead generation. You have to understand that different sources of leads will have different costs. If you are using a shotgun approach and just trying to get a massive list of suspects, your costs will obviously be higher than if you are specifically targeting million-dollar producers in a niche market.
It’s great to build a database of advisors, but unless your database is filled with people who are qualified to do business with you, you are doing yourself and your sales team a huge disservice. I hear too many companies brag about the size of their internal list of prospective advisors, but what ultimately happens is that you end up creating a list of people who won’t do business with you.
“The key to being successful with your marketing is how you manage and follow up with leads.”
It is all too easy to look at your marketing efforts on a spreadsheet and compare the number of leads and cost per lead. It’s easy to look at the raw numbers and make decisions, but you have to look deeper. Are your recruiters having good conversations? Are you getting contracts or business? Are you attracting large producers or small fish that you’ll be lucky to get a piece of business?
Throughout the year, we regularly review overall results, and it’s usually surprising to our clients that the campaigns that didn’t yield as many leads as other campaigns were actually the most profitable. We once had one client who generated 2,700 leads over the course of the year with 15 different campaigns. During our review the client stopped us when we came to the ad that generated the fewest number of leads to tell us that they recruited the biggest producer of the year from the ad that was statistically a loser. Unfortunately, they abandoned the ad and never ran it again.
Oftentimes lead counts are all you have to go on when making decisions, because it takes time to get people contracted and writing business with you. This process can take three to nine months to happen, so you have to rely on your foot soldiers to keep you updated on the quality of leads, the conversations they are having and the opportunities that exist.
We have had clients leave us over the years (because they thought originally the “CPL was too high”), only to come back once they discovered how much profit they actually made when the leads turned into business. The problem is, they lost momentum and valuable time marketing that can never be recuperated.
Sometimes cheap lead sources work great. Using a cheap email provider, social media or Google AdWords can be effective, but you will hit a ceiling where you just can’t get enough leads. For instance, if you buy a Google AdWord for “Annuity Leads,” the cost is only about $6.25 per click, but the problem is that there are only an estimated 20 people searching for it a month. You have to expect that you will have different prices per lead, but don’t ever overlook the quality of a lead.
The overall quality of leads starts with your offer. It’s very tempting when creating an offer to build a campaign that will generate as many leads as possible. This is often done by trying to appeal to as many people as possible to get them to raise their hands and tell you that they are interested. Giving away gifts, trips, software, videos or anything with high educational value is always a great way to get people to respond, but it doesn’t always attract your ideal prospects.
The key to being successful with your marketing is how you manage and follow up with leads. If you are generating too many leads or unqualified leads, you are creating a follow-up nightmare for your staff. The last thing you want them doing is spending their days chasing bad prospects and ghosts that seem to take great pleasure in requesting information from every company on the planet.
Marketing guru Dan Kennedy preaches that a business should spend as much as it can afford to generate leads. If an advertising platform is capable of turning a dollar into a dollar fifty, then it’s a great investment and you should keep doing it until it stops working. Calculate your value of a producer (using our spreadsheet found in Issue 1) and spend as much as you can afford to get more leads by fishing in the same ponds where you found them.
Remember, a lead is not always a lead and some leads are much better than others. Too many marketing decisions are based on CPL rather than the actual lead value. When analyzing your advertising effectiveness go beyond “cost per lead” and look at “value per lead.”