Getting More Leads

Lead Acquisition Cost
Can be  a painful topic to many business owners for one of 2 reasons. Firstly they may not know, or secondly, they may be all too aware of the expense involved,  just getting the phone to ring! It’s pretty easy to do some ‘quick and dirty’ maths that will either cheer you up – or make you take a long hard look at the ‘front end’ performance of your business.

Try this simple exercise for yourself.
Add up all the annual costs associated with your advertising and sales, divide by 12, then divide that number  by the number of enquiries you get in a month.  The figure differs wildly from one business sector to another of course, and is only a rough measure of performance – but it’s still probably higher than you imagined.

That’s the first part of the problem.
Just figuring out roughly how much it costs to get the phone to ring! Logically the next stage of the process should aim to figure out how many of those expensive leads get converted into paying customers. So take the monthly cost figure from above and divide it by the number of customers coverted from the leads – Now thats going to produce a much larger figure – because unless we’re selling tenners for nine quid – we are not going to convert every incoming lead!

These are the ‘Vital Statistics’
Of any business that relies on sales – and that means pretty much every business! Armed with these numbers – Lead Acqusition Cost and Customer Acquisition Cost - we can make informed decisions about how to change, improve or cancel the various strategies that make up our business plans.

Recently I’ve dealt with two business owners, in completely different service sectors, in different parts of the country – both were really shocked at the results produced by the simple maths exercise above. Each of them had Lead Acqusition Costs well in excess of £200. For whatever reason, this cost analysis had either eluded them, or gotten out of hand over the years. The simple fact was that every time the phone rang with a potential new client – it cost over £200!

Once things are explained in this simple, matter-of-fact way, it’s easy to explain the benefits of new technology to people! Both these owners have now reduced their dependence on conventional advertising and  have simple, measurable  systems in place to measure where leads come from.

Most importantly, they’ve increased the number of leads they get, whilst at the same time reducing the Lead Acquisition Cost by a factor of 5.

It’s easy to get sucked into the delusional world of Yellow Pages, Colour Pages, Directory adverts and other ‘Brand’ advertising’ – it’s a profitable game, for the ad companies.

I’m also pretty sure that some of their salesmen prey on the insecurities of business owners, making them fear that if they aren’t in ‘it’ , then their competitors will make off with all the trade.

But wait a minute! They’re probably telling the same tale to your competitors too! All I’m suggesting is that you make up your own mind and base your marketing decisions on FACT, not FEAR.

If you want to reduce your ‘vital statistics’ email me using the form on this page or give me a ring
Tel:  07950 232926