Lead Generation - Knowing Your Customer -- It's the Key to Quality Leads

You really canít generate profitable leads if you donít know what youíre looking for -1998

by Robert Hoffman

"Why is it so important to know your customer?" The short answer to this question: you really canít generate profitable leads if you donít know what youíre looking for. In my last article (USPs: Your Key to Selling Success), I briefly mentioned that the idea of hoping everyone is a potential customer is not the most profitable way to run a business. In this article I'll explain how a lead generation system allows you to collect only those leads that provide you with the kind of customers that will maximize your profits.

Lead generation vs. conventional prospecting
A lead generation system is the other side of the prospecting coin. There are essentially two ways to attract potential customers: you can either push them toward you or pull them toward you.

Pushing is equivalent to prospecting, or doing it the hard way. Prospecting is inefficient because you inevitably expend a lot of effort talking to people who rarely become customers.

I recommend pulling the potential customers to you using a lead generation system. Using a lead generation system eliminates the worry about where your next customer is coming from. By definition, this system automatically provides you with a steady stream of highly motivated potential customers. A lead generation system also provides precise control over how you spend your time selling and the type of person youíre selling to.

If your job is to sell, youíll be spending more time with qualified leads that are prepared to make a decision. If you operate a small shop and would like to spend more time in the shop, not the office, a lead generation system will provide that time.

Developing your lead generation system
The first step in developing a lead generation system is to define your "perfect" customer. Defining the perfect customer requires that you establish the type of jobs you prefer--generally, those that provide the greatest revenue in the shortest time. It helps to carefully study as many completed jobs as you can.

Organize the income data by job or sale type. Then carefully start piecing together an accurate picture of what these prize customers look like. How they act, what they do, who they know, and so on. Figures 1 and 2 contain the specific facts youíre looking for.

Figure 1.
Statistics and Dynamics for Consumers

  • Location

  • Age

  • Education

  • Occupation

  • Income

  • Marital status

  • Family size

  • Hobbies

  • Travel

  • Sports

  • Interests

  • Brand loyalty

  • Automobile

  • Size and style of home

  • Where shop

  • Entertainment preferences

Figure 2.
Statistics and Dynamics for Business, Industrial, and Professional Contacts

  • Location(s)

  • Size by revenue or number of employees

  • Market share

  • Hierarchy of purchasing authority

  • Type of product or service

  • How distributed

  • Trade association memberships

Yes, itís going to be a difficult task. Yes, it will take a lot of time. It should involve interviewing or surveying customers individually. Offer them a gift for their time if necessary.

You need to become a private investigator of sorts. If youíre doing retail installations on site and see that your particularly profitable jobs come from homes with children, make a note of that. If youíre a wholesaler of lumber and notice you sell more high-margin material to small, rural cabinet shops, use that data. To effectively increase sales for your business, you must have this type of information.

Your ultimate goal is to find out what common elements exist among these customers, and develop an "ideal customer profile." For a lead generation system to work properly, this profile should equal at least three or four paragraphs of written copy.

Writing the lead generation ad
With a "picture" of your ideal customer in mind, you can now create the lead generation device.

Usually it will be a small space advertisement, but other possibilities include a classified ad, radio spot, card deck mailer, etc. Writing the ad is easy--simply direct it precisely to whom you wish to speak.

Some great examples of lead generation ads can be found in the personals section (yes, the dating advertisements) of any newspaper. These can provide great models for a short, to-the-point ad that attracts only your target audience. You, the advertiser, control the entire process.

The lead generation ad can be small in size and minimal in copy. But it must make a big promise to the intended reader and include very specific instructions on how to respond. The most successful lead generation ads contain one or more of the following:

  • A statement of great benefit, possibly your Unique Selling Proposition (USP) [[[LINK GOES HERE]]](for more on USPs see my previous article

  • An offer of a free bonus with purchase

  • An offer of a free gift for inquiring

  • A promise of a free recorded message to obtain additional information

The ad absolutely must be exciting and worthwhile to read. The following is an example of an almost "foolproof" lead generation ad:

Award-winning custom woodworking firm has available FREE report on "7 Little-Known Ways to Save Money When Remodeling." If youíre remodeling your kitchen within the next 90 days and plan on spending between 10 and 15 thousand dollars, call 555-5555 for your FREE report.

This little ad determines that your respondents will be ready to do business in the near future. Only readers interested in kitchen-oriented jobs of the size you've defined will respond. This text is suitable to be used in a small display ad, classified, postcard, card deck, or piggy-backed on the noncompetitive mailing of another business.

What do I do with the leads Iíve collected?
You need to follow up on the leads you've collected in a timely manner. Donít miss your chance by waiting too long. Make sure that your promises are kept.

The consumer expects the world--show a great deal of care in processing your leads. The same goes for business-to-business sales. After all, businesses donít buy anything--people do.

Donít forget how beneficial repetitive follow-up can be. In this age of database programs and laser printers, there is no excuse for not maintaining a mailing list. Make the most of it by regularly sending out interesting, exciting offers to those who have expressed interest in your product or service.

This column can only begin to give you some ideas about developing a lead generation system. If youíre serious, there are a lot of books available on copy-writing to help you. For a specific recommendation or an an ad idea, send me an e-mail message.

Robert A.Hoffman is an independent marketing consultant specializing in direct marketing and asset redeployment techniques. He can be reached at e-mail: thg@execpc.com