Lead Generation Strategy

 

 

There's one simple question I always ask myself before spending money on marketing, "How much will it cost me to generate 1 Good Lead with this method?"

 

For me, personally, any answer that comes in below $250 for 1 Good Lead is at least worth considering. That doesn't necessarily mean I should spend $250. Maybe I should. Maybe I shouldn't.

 

 

For instance, maybe I have $1,000 to spend on lead generation this month, but I already have two places that can get me two good leads for $100 each, and one place that can get me four good leads for $200 each.

If the leads are all good (meaning they can be closed at a high enough percentage), why would I spend $250 on four good leads when I could spend my $1,000 and get six good leads?

Two more good leads!

 

Two more leads is huge because maybe I end up selling an extra job or two from those two leads. The more good leads I can run, the more money I'm going to make. My profit per job sold is at least 2X greater than my cost per lead sold.

 

 

There's a rule about lead generation that I want you to memorize...

 

 

Sure, it's possible to generate good leads from your advertising for $25 each...or even less!

 

The problem with minimizing your cost per lead is that you also end up minimizing your opportunity. If the only places you're willing to invest in lead generation are the places that only cost $25 or less, you're going to run out of places to invest very quickly. The old-timers might say you're "cutting off your nose to spite your face" or "penny-wise, but pound foolish."

 

 

Would you rather get one good lead for $25 every month or six good leads every month at $250 each for a total of $1,500?

 

 

$25 PER LEAD: Assume you're a good closer and you end up closing 1 in 3 good leads. How many months will it take you to make a sale at $25 per lead?

Do you have any overhead or living expenses you have to cover in the meantime?

What is your average profit per sale? Is that enough money to cover your overhead and living expenses?

$250 PER LEAD: We're still assuming you're a good closer at 1 in 3 good leads. How many leads can you generate in a month at $250 per lead with a $1,000 advertising budget? How many sales will you make?

What is your average profit per sale?

 

Finally, will you come closer to paying your monthly overhead and living expenses making 1 or 2 sales a month at $250 per lead or would you be better off making one sale every 3 months at $25 per lead?

 

 

I may have distracted you from the real answer to these questions...

 

The real answer is if you have a source where you pay $25 per good lead, but can only get 1 every month, and you also have one more source where you know for sure you can get good leads for $250 per good lead, you should be buying both, up to your total advertising budget, because you make a profit from both lead sources.

 

 

Stack all of your known lead sources up from lowest cost per lead on top to highest cost per lead on bottom and then buy all you can from top to bottom until you've spent your monthly advertising budget.

 

If there's still leads you could have bought at the end of the month, but didn't have the budget to buy, save your profits and increase your budget so you can sell those leads too. 

 

If you do enough testing, you can always find a cheap source of leads.

 

- Door knocking is cheap!
- Referrals are cheap.

- Social media leads are cheap, too.

 

 

When you know how much you can afford to spend on good leads, your first question should always be "How much will it cost me to generate 1 Good Lead from my advertising?"

✌ Mike