Lead Generation Programs: How Do They Really Work?

Business people in all areas of sales (retail, real estate, CPA, lawyers) deal with the question of how to acquire customers. Direct sellers need to understand the costs and rewards of the various types of customer acquisition. The different methods range from high to low cost.

Marketing to friends and family might be considered low cost, but at some point most direct sellers run out of existing relationships to share the product and opportunity. Developing relationships is considered a high cost method (in terms of time and maybe money) but it’s now easier to connect and grow relationships with acquaintances—those people outside of our immediate circles. You can ask your friends to connect you with people they know who may be interested in your product (see Strength of weak ties.)

If relationship techniques are running out, you may be considering a high cost or buying a lead list. The method by which a lead list is generated and verified determines the usefulness of the contacts, and buying bad leads might cost you in more ways than you think. In any industry, there are unscrupulous companies who acquire lists without the consent of the listed individuals. The FTC explains that you can be held liable for contacting a person on the do not call list. The best tip the FTC gives is to know how a company collects leads. One of the unscrupulous examples of lead generations is when a lead company “offers” a free iPad or other gift to entice you to fill out a survey. The survey collection is the goal and no one really receives an iPad.

Getting leads is key to all industries. How the lead list is generated makes a difference in how valuable the leads are. Asking potential customers to fill out a survey in order to receive a potential reward can be a good way to gain valuable information. However, the more often the survey/ free iPad combo is used, the less useful the data becomes. You start getting the same type of people who will take the time to fill out the survey. If you are lucky enough that the demographic that fills out surveys for a chance to win is who you want, that’s great. Other times, companies sell their data about customers to other lead generation companies. What a person purchases on one site may be sold to a lead generation company.

How the lead generation company groups the lists once they get the names can also make the lead less useful. For example, let’s say a customer bought a pair of running shoes on a website. That person may then be placed in a group of potential athletes or potential dieters. How the lead group occurs is important. Certainly, good lead generation companies exist. The key is to do your homework.