How to generate great leads that make sense for your business
I often get asked how we generate business leads.
This is an issue every company struggles with, because without prospects you won’t grow – even if you have great product ideas, great teams and enough money.
I’d say we do a very good job generating leads at Klipfolio – thanks to a lot of hard work and an understanding of what works for us. But what works for us won’t necessarily work for someone else.
So here are my thoughts about lead generation – based on my own experience, and on the wisdom imparted by Aaron Ross, author of Predictable Revenue and From Impossible to Inevitable.
The first thing you have to understand is your business model.
You can’t begin to think of lead generation without understanding what you are selling and who you are selling to. How you generate leads will depend to a very large extent on whether your pool of potential customers is small (say, a dozen large pharmaceutical firms) or large (which would be the case if you’re selling inexpensive consumer items).
If your pool of potential customers is small, you will almost certainly get better results by having a skilled group of salespeople work on establishing relationships with potential clients.
If your pool of potential customers is large, you will do well to emphasize things like brand recognition and online presence, and continue to work on making each stage of your lead funnel as efficient as possible.
This means that the group that ‘owns’ lead generation in your firm will be different depending on what you need to do.
The sales department will hold prime responsibility for generating leads if your pool of target customers is small. But your marketing department would end up with primary responsibility if the pool is big.
There is another ‘owner’- two actually- that only recently started getting recognition, and which can be effective across both a small target audience or a massive one. It is your product team and your support organization and how they can combine to influence lead generation by stimulating word-of-mouth referrals. I’m really excited by this one because, it really aligns the needs of your customers with the value and experience you are delivering.
To help understand the different approaches to leads, I have found Aaron Ross’s books to be particularly helpful.
Ross says that businesses need a combination of three kinds of leads to maximize revenue.
The first he calls seeds. These are leads that come from word of mouth.
This is a great form of lead generation because it’s free - in that it’s not a sales or marketing expense.The expense is in making a great product and support experience. And it has the potential to go viral. However, without a large customer base, it’s random and difficult to control. You never know which seed is going to grow into a new client.
The best way to encourage seeds to take is to have a great product and excellent customer support. Seeds will become strong lead generators when the user experience with your product is exceptional. At volume, this is where companies start thinking of the k-factor - the viral coefficient of how many referrals a single customer will generate. LinkedIn is one of the best companies in the world for optimizing this factor.
At Klipfolio, we rely a lot on seeds to generate leads. To encourage this form of lead generation, we have paid - and continue to pay- a lot of attention to the product experience and customer service.
As a last note on seeds, we use a tool called Influitive out of Toronto, to help us engage and build great relationships with this group (we call them advocates).
The second kind of leads Ross talks about are nets. These are leads that result from efforts that are broad in scope, but not necessarily targeted to a particular company or group.
These leads result from creating brand recognition, establishing a social media presence and more general marketing, plus search engine optimization, so that people can find you.
Casting a wide net requires a lot of effort, and not everyone who shows interest is a qualified customer. However, in our case, we have had the most success with nets.
For example, we have put a lot of effort into content generation, blogging and being active in social media. This is critical for search engine optimization - likely our most important output when thinking of our lead generation efforts. We play well with Google, and because of that we’ve been able to significantly expand the size of our net.
The net approach works well for us because our basic service is affordable and we appeal to a large number of potential customers. Plus, the decision-making process is relatively quick - customers can sign up with very little consultation, if any.
Spears are leads your sales team works actively to find, solicit and close.
Targeted leads can bring great results, but you can’t easily repeat the process. There are not that many large clients around. Just because you’ve signed a huge contract with a big firm doesn’t mean you can repeat the process the next day – or the next week.
Targeted selling - spears - works well if your solution requires a long cycle to educate the customer, negotiate the buying process, and build trust. Also, this generally only works if your selling price is sufficient to support this effort. This approach - because usually your sales cycle is complex and long- will cost you the most per new customer, so the revenue generated must be large enough.
It should also be noted that for a startup, this is almost always the first way you’re going to get your first 50 customers. It’s also the process by which you’ll learn the most. Being directly involved in the sales process, hearing the concerns and truly understanding the repeatable pain your customers have, is hugely valuable as you’re nailing your product fit.
Ross says the three types of leads are complementary and should work together. For example, at Klipfolio, our marketing efforts “net” us most of our leads, which turn into customers quickly and with little sales handholding. We use outbound prospecting to target specific partners (a slightly more complex sales cycle) and will also target key accounts using a “spear” approach. And, we really take product and support experience seriously because this is how we are building out a loyal base of fans -- seeds -- who spread the word to future customers.
But the fact is, some will be more important than others, depending on who you are and what you do. So it really does come down to knowing your own business.
Allan Wille is a co-founder of Klipfolio, and its president and CEO. He’s also a designer, a cyclist, a father and a resolute optimist.