10 Ways Marketing Can Lower Your Cost Per Lead
Management wants more leads, but you can't get an increase in your budget. To meet their demands, you have to lower your cost per lead. You have to either increase response rates or cut your cost per contact.
There are literally dozens of ways to accomplish those goals. Here are 10 we find effective:
- Keep your objective firmly in mind: selling the next step. Too often, lead generation efforts—direct mail, in particular—jump off track and attempt to sell the product or service. You will increase response rates if you focus on just getting prospects to raise their hands.
- Mail a more intrusive (and probably more expensive) package. Think dimensional packages with a premium inside. Also consider how even a simple package is delivered. Use overnight services (FedEx, DHL, UPS) to talk to your top prospects. Certified mail gets attention, isn't used much and costs less. You raise your cost per contact but can significantly boost response rates and lower your lead cost. The smaller the market you serve, the more intrusive you need to be to achieve a viable number of leads.
- Spend a lot of time researching lists. They're the most important factor in generating response. If you're using compiled lists, make sure they're updated at least monthly, if not more often. If possible, rent lists of known respondents to direct mail—they normally produce higher responses than compiled lists. Decide whether it's better to mail to a broader range of companies or deeper into a smaller number of companies.
- Make your offer more appealing and more prominent. Next to lists, offers are most important in generating response. White paper and special report offers not only increase response but also, generally, produce more qualified leads. Certain merchandise premiums—from T-shirts to electronic gifts like mini digital cameras—have shown strength in B2B mailings. Try beginning your letter with the premium offer and then featuring the offer on a separate buck slip within your package.
- Try a multimedia approach. For example, paid search engine marketing can produce raw leads inexpensively; you can then follow up by mail or phone, or both. If you have an internal prospect list with opt-in email addresses, you can email first to skim off the cream, then use direct mail efforts that get progressively more involved (i.e., tell more of the story, do more selling). In vertical markets, you can use print ads to herald the sending of a direct mail package or email.
- Test referral programs. Ask customers to refer colleagues and friends. You'll want to try this on your most loyal customers first. Give them an incentive—dollars off support, an extra month of service or a free gift—to do so. If you ask a customer for a referral, you must follow up immediately with the referral. Successful referral programs both help lower your lead cost and are a natural way to clone your customer base.
- Target by vertical industry or size of company. For example, your product or service may appeal much more to those in industries where there is a lot of information processing—banking, insurance, wholesaling. Fortune 2000 companies may require different approaches and offers than middle-market companies. Follow this targeting by segmenting your creative and offer strategies—even to different functions within the same company. A CFO will have a much different agenda and set of priorities from a VP of manufacturing or VP of sales. Invest in personalization technology to maximize response rates.
- Build customized or personalized response site-lets. If you're personalizing your direct mail or email by industry, company size and executive function, take the personalization to the prospect's next step—your Web site. Response rates increase 50 percent or more when the prospect's name or company is in the URL.
- Market with and through trade associations. Today's business buyers are just as skeptical as consumers. It's difficult to build credibility and trust at the same time that you're trying to generate response. Leverage pre-existing relationships to get the benefit of the doubt. Getting the imprimatur of a major trade association can increase response dramatically and lower front-end marketing costs. For example, if your market consists of real estate brokers, working with the National Association of Realtors and becoming a Preferred Partner can increase response dramatically over marketing to brokers under solely your own banner.
- Share, trade and co-market. Trade or buy leads from companies with profiles similar to yours. You may be also able to co-market with them. For example, if you sell a service to HR professionals, you might explore (a) having a link on a site that sells forms to the same targets; (b) buying names of people who double opt-in to receive product and service emails on that same site; and (c) putting an insert into renewal efforts for a newsletter serving that market.
Some of these ideas are easy to understand in concept, but not so easy to put into practice. So one last way to lower you cost per lead is to engage a resource that does this for a living. It's often better to spend money to get it right the first time.
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