Marketing leads

What are marketing leads?

            In today’s business vernacular the term marketing leads generally refers to the contact information of people or entities who may be interested in buying a product or service based on their demographics.  The term can have other subtly different meanings, but for the most part it refers to gleaning a database for all listed persons, businesses, or non profit organizations that match certain qualifications such as age, race, gender, income, or location. 

Leads that become qualified by the nature of their personal characteristics do not convert as well as lead generated by their behavioral characteristics.  This is why marketing leads tend to be much cheaper than leads generated by search engines or companies that require leads to fill out forms in order to contact the lead purchaser.

For example if a marketer for a wealth management service in Chicago buys a list of 100,000 high net worth individuals in the city of Chicago that list will include folks who are already very satisfied with their current financial advisors or have no interest in hiring a financial advisor.  On the other hand if that same marketer buys a text ad on Google that shows up every time someone searches for “Wealth Management Company in Chicago” the leads he gets from that ad will probably convert into customers much better because they have demonstrated an interest in hiring a wealth manager.

 

When to use

1. Your customer base can be easily targeted by demographic information.

This is the most important question to ask when determining if marketing leads are right for your business. 

Some businesses can easily target by demographics.  For example a company that sells saris can easily target potential customers by the nature of their demographic information because the people who will buy this product are sharply split along racial (Indian Americans are very likely to buy, non-Indian Americans are very likely to not buy) and gender (females are likely to buy, males are likely to not buy) lines. A company like coca-cola on the other hand will have difficulty targeting customers by demographics because its potential customers are a diverse crowd.

 

2.  You have a sales channel that uses few resources pursuing each lead.

If you plan on making your primary initial contact with these leads by direct mail, email, or low skill telemarketers, marketing leads may work for you.  It doesn’t make economic sense to hire a highly skilled salesperson to call a list of marketing leads because most of them have no interest in buying your product or service.

 

3.  You have a process of separating leads based on interest level plus the strategy and means to use different tactics on different leads.

Many companies successfully pursue a “churn and burn” strategy when marketing to a large list of marketing leads.  Usually there is a low cost initial contact that determines the interest level of the lead.  Often leads are separated into three groups: hot, mild, cold.  Hot leads are immediately followed up on by a skilled sales person trained to move towards closing the deal.  Mild leads are often sent more information or called by a sales rep trained to pursue soft-sell tactics.  Cold leads are not followed up on initially, but their records are kept on file for potential future contact.

If marketing leads won’t work for you business, but you do want more leads I suggest you read my knol about online lead generation.

 

How marketing lead providers operate

            Essentially theses companies want to collect data on a large number of individuals and entities that is valuable to marketers in a cost efficient manner.  They glean data from many public sources such as: phone books, US postal service, federal, state and local government records.[1]  This data is cleaned and cross-referenced before being stored in a master database.  Normally they want to kind of info a census taker would want, plus phone number.

  

          Modern lifestyles have made it more difficult for these companies to keep accurate records of contact information.  Twenty years ago cellular phones were rare and exceptionally expensive items, but today many people have a cell phone and no land line.[2]  Because cell phone records are not publicly accessible, and the Telecoms intend to keep it that way, it is more difficult for a company to keep an accurate telephone number on file for all Americans.  Additionally people move more frequently these days.[3]  A generation ago most people spent their whole lives in one or two cities, but today more people are moving about the country for job changes or schooling.

           

How to buy good leads

            All lead vendors will vary in price and quality and because lead spend is judged by ROI metrics companies will not look for the vendor with the highest quality leads, but the vendor whose leads provide the greatest return on investment.  If you are serious about buying marketing leads I suggest researching all the companies that can provide the type of leads you need, compiling a list of all vendors that might work and buying leads from all of them on a trial basis.  After a few months of collecting data on how the leads perform you will know which vendors work best and you can allocate your budget accordingly. 

See Also:

1. Lead Generation for the Complex Sale - Book by Brian Carroll.
2. "Exclusive Leads" - A knol I wrote comparing the costs and benefits of exclusive versus non-exclusive leads.
3. lead generation, sales, and autoresponders - A tutorial video from Mike Bashi
4. "Lead Generation - Quality vs Quanity" - Article by a Lead generation professional.
5. "Online Lead Generation" - A Knol I wrote about leveraging the power of the internet to generate leads.