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How to Generate Leads: Referrals, Opportunity Leads, Advertising and Cold Calls

July 26, 2010
Jay

One of my University students recently asked me how we have built our business and what we do for lead generation. I would be interested in your comments and experiences, please share your thoughts below.

I learned in a sales training course that leads work like this: Referrals close at 80%, opportunity leads close at 50%, advertising leads close at 25% and cold calls close at less than 10%. I believe this has been true for our business, let me explain.

The Best way to generate leads for any business, in my opinion is word of mouth. Especially when someone asks another person ‘Hey how did you lose all the weight?’ ‘Where did you get those shoes?’ or ‘Wow, I see your website all over the internet who does your internet marketing?’ Those type of referrals are the best because the prospect is actively looking, and they are referred by someone who they trust and respect.

The reality is that when you’re just starting out, you can’t get too much referral business because you don’t have a lot of connections and clients and past clients. And an important source, employees of past clients who change jobs.

The second category of leads, which I called ‘Opportunity Leads’ are generated from speaking at events, networking and community service.

If you’re just starting out, finding clients is like finding a job. I recommend that you do a lot of ‘information meetings’. I used to go present the Ten Golden Rules of Online Marketing presentation to anyone who’d take the meeting. I did lunch and learns for companies that I could partner with like Web Developers, Ad Agencies and PR Firms. I spoke at the all-employee meeting for a Trust Company.

I also worked very hard (and I still do) to get speaking engagements. I spoke in the back room of an Office Dept Store to about 10 people. I spoke at the Rotary Club to 7 people, and sure enough, one of them was planning a National Sales meeting and he booked me to speak there. I spoke to the local Women in Communications chapter, and the National Programming Chair was there and she booked me to speak at their National Meeting in Orlando.

I was involved with my local Chapter of the American Marketing Association and I went on to become the Chapter President. I was on the Founding Board of Directors of SFIMA.com the South Florida Interactive marketing Association. I am active in a number of associations and private mastermind groups today. If you are an active participant in these groups you stand out from many board members who rarely show up and don’t always honor their commitments. With a little hustle, it is easy to shine in these groups and become known for your expertise and your effort.

Finally, Networking. The first tip is to show up, regularly. You won’t get a lot of leads from going to 1 meeting for a group, or from the first time you go to the annual conference. When you become a regular, and a participant, you’ll see the opportunities flourish. My tip for generating leads from industry events and meetings is to learn the skills of a great networker. DO NOT SELL YOURSELF. Help people. Listen to them. Why are they there? Are they looking for leads, jobs, employees, a date? Follow up with them (you’ll likely be the only one who does follow up) and send them a reference or a contact that can help them with their objectives. The Law of Reciprocity states that people will feel like they want to help you in return and the good karma will likely come back to you, especially if you don’t feel like anything is owed to you and you give with no expectation of getting anything in return.

‘Opportunity’ leads are the second category I mentioned above, in general you might be able to close 50% of these, depending on your business. When you do get a lead from someone you met at a Networker, or from someone on a committee, they aren’t quite as good as referrals. This is largely because the person isn’t actively looking for your services and they weren’t referred by a trusted source.

We do some advertising, and a lot of internet content development. We have also done some trade shows. Leads form these sources close at about 25%, if you’re good. I think this is because people look at a lot of competitors in these situations and they don’t know your firm at all. So you are competing with a large number of options with no initial differentiation.

Lastly, cold calls are best avoided if at all possible. Most people hate the invasion of privacy from a phone call or in-person solicitation. These take a lot of hard work for very low rates of return. In our business, which is a very strategic boutique style consulting approach cold calls are not going to yield very many high quality leads.

Good luck, I hope this helps.