The Lead Generation Equation

It’s important to think of lead generation as a starting point for ongoing relationships. This is where business owners so often go wrong–they get the lead and then they never follow up. Many owners give this critical first step short shrift.

Lead generation is formulaic: Value received + Value promised > Investment + Information

Leads provide you with information. In the digital age, this is less risky than in the past, but potential customers are risking getting spammed, etc… There is always a tradeoff. Naturally, they are only willing to make the trade if the benefits outweigh the costs.

There are two elements of value, which must both be present to generate a lead. First is value received. For example, if a potential lead is attending a conference, and you (the business owner) are on a panel and provide real insight, the value received is the information you provided. It is the immediate benefit, usually in the form of knowledge, gained from the first contact (whether in person or online).

However, this is just part of the equation. There must also be promised value; for example, your website touts that you can increase clients’ conversion rates by up to 70%. It does not provide value now, but positions the possibility of future value. Obviously, promised value alone will not generate the qualified leads you’re looking for. However, promised value is an important part of lead generation. Without it, potential leads have no incentive to reach out to you or provide you with their information.

While increasing your conversion rate is a great way to increase your new business, it’s also important to remember to keep up with lead generation. It sets you up. Generally, any opportunity to provide value, coupled with a strategy to promise value, has the potential to generate leads.

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