Why You Shouldn t Pay For Sales Leads

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1 Exclusive Whitepaper Insider For New Home Salespeople & Aging-In-Place Providers Why You Shouldn t Pay For Sales Leads Steve Hoffacker 1 Whitepaper: Why You Shouldn t Pay For Sales Leads Steve Hoffacker

2 Why You Shouldn t Pay For Sales Leads Steve Hoffacker, CAPS, MCSP, MIRM Contents 3 We all like shortcuts 3 This is not a new idea 4 The quality of the leads 5 Lead generation companies have no skin in the game 6 Buying leads is not a good idea 7 The concept of lead generation 8 Don t trust anyone else to tell your story 9 You have tremendous potential 10 Taking your potential on the road 11 Make it work 2 Whitepaper: Why You Shouldn t Pay For Sales Leads Steve Hoffacker

3 We all like shortcuts Hardly a day goes by that I don t get an or see an ad for lead generation services. They sound so attractive. Pay a few dollars and sit back to reap the benefits of what someone else has already invested in vetting potential customers and clients. Oh, if it only were that easy and that good. This is as the saying goes too good to be true, and as such should be avoided. But why do such offers appeal to us? I can think of two reasons. First, we all need more business so if someone else can help us generate fresh leads, why not? Second, we are basically lazy. We look for shortcuts to make our day easier and less stressful whether it s software, automated systems, appliances, or office machines. As I ll explain, using lead generation or lead provision services really provides no shortcut and may actually produce more frustration. This is not a new idea The idea of using a service for important business functions is certainly not new. Before everyone entered the computer age, there were secretarial and word processing services that would type letters and transcribe dictation. There were bicycle and automobile messenger services for delivering documents across town before or express mail and some remain today for important deliveries that have to be made within a few hours. 3 Whitepaper: Why You Shouldn t Pay For Sales Leads Steve Hoffacker

4 The internet has produced a new occupation known as virtual assistants (VA) who can live anywhere even in another country and provide data entry, website updates, mailings, and other services for us online or with a cloud. Lead generation services existed before the computer age. They are just more visible now. Before everyone had access to computers, we would purchase mailing labels or a limited hard copy database. Now we can get an electronic database with a list of names, addresses, and sometimes phone numbers. The quality of the leads The first question I have with any lead generation service is the source of the names and contact information they are furnishing. It s easy for anyone to compile and sell names to someone else and assume no liability for their quality, usefulness, or effectiveness. Who determines the quality of them if anyone? Is potential quality and usefulness really the point, or is are the names assembled and sold just to satisfy the need for salespeople to take a shortcut and reach out to companies willing to sell them a bunch of names? Ever wonder if these names are just assembled at random? Are they purchased from a direct mailing house by zip code, city, income or other criteria? Are these names collected from a subscription or opt-in list? Are they discarded or recycled leads from somebody else? Are the names out of a directory? Are the names vetted in any way? Likely not or the cost per name would be much higher. Even if the names are assembled from a set of household, 4 Whitepaper: Why You Shouldn t Pay For Sales Leads Steve Hoffacker

5 consumer behavior, or economic criteria, there is no guarantee of their interest level or purchasing ability for what we are offering. Let s stop and ask ourselves why someone would be willing to give us a legitimate, bona fide buyer that has been prequalified or determined to be ready to purchase what we offer for just the nominal fee of purchasing that name rather than requesting a finder s fee or some type of participation in the sale? Kind of puts things in perspective. We are trusting a company that we have never met to help us with the most important, most sensitive, most crucial part of our business, but they have no stake in this other than selling us a list of names. They are providing names and contact information of unknown value to us for a fee. What happens after that is up to us. Based on story after story I have read from people purchasing leads and it might be dependent on the type of business the value was not there. They got nothing useful for their purchase. Lead generation companies have no skin in the game We really shouldn t expect that an outside service who has never met us, never discussed what products or services we offer with us, has no idea of our pricing strategy, and doesn t know what we consider to be a good referral for us to be in a position to provide any potential purchasers, customers, or client to us for free or otherwise. They have no skin in the game. This is strictly a business transaction for them a sale of perhaps questionable value (depending on useful any of the names might turn out to be). They make the same offer to anyone who will pay their fee. 5 Whitepaper: Why You Shouldn t Pay For Sales Leads Steve Hoffacker

6 They aren t coming along side us as a strategic partner to help us build our business. They aren t determining in advance what types of leads we need. They are simply offering a collection of names large or small for sale. If the leads aren t useful and there s good reason to expect that this would be the case they still get to keep the money and move on. There are no guarantees. If we should happen to get a useful name or two from our purchase, we would feel better about it, but the company selling them to us would be indifferent. It s still just a sale to them. Buying leads is not a great idea Just as even a broken clock is accurate twice a day, there could be a few types of businesses where a purchased lead might be appropriate. If someone has a product that is applicable to a wide geography, not particularly expensive, and not respective of age or gender, a lead service could work. Food or beverage comes to mind, but then is buying leads really necessary for a product as accessible and available as that? If it s something like a car or home, the sales leads need to be close enough to the actual item to take delivery, and it has to meet their needs including pricing and financing. This narrows the availability pool for quality names quite a bit. Even relatively common items like housewares, holiday decorations, auto accessories, and tools tend to be gender related or more appropriate for particularly ages. Thus, a company selling bona fide leads that could actually be helpful would have to be in a position to reasonably and appropriately collect them in the course of their normal business, and this just may not be that practical. 6 Whitepaper: Why You Shouldn t Pay For Sales Leads Steve Hoffacker

7 Who is going to contact a third party about a product or service they are interested in unless it s to sign up for a mailing list that they think will help them but is really being used just for collecting the leads and not for providing any information to the subscriber? The concept of lead generation Let s get right down to what lead generation actually is regardless of who does it. It is a marketing function that attempts to locate and identify people who might like to purchase what you offer. After that, the sales process takes over. Most traditional lead generation is passive. It relies on floating a message in front of the public and have someone latch onto the message and contact us much like fishing. We are in essence baiting our lines with a message that we hope will be attractive to someone, we are fishing in waters where we believe our potential customers to reside, we are dangling the message in front of them, and we are counting on someone actually several people grabbing our hook so we can connect with them. Passive lead generation includes newspaper, magazine, billboard, signage, flyers, posters, and other print advertising, direct mail, radio and TV, internet ads, and most other efforts where the specific person we want and hope to contact is unknown to us. Of course there are referrals that we get which are a great source of leads, but we never know how many we will get or when they will contact us or show up. Then there is the reliable source of lead generation, and that is what I term intentional. This is the opposite of passive because we know exactly who we are engaging even if we are meeting them for the first time. We might meet 7 Whitepaper: Why You Shouldn t Pay For Sales Leads Steve Hoffacker

8 someone in person either a planned or impromptu meeting, we might call them, or we stop by their place of business. Regardless, we know the person at least by name that we are engaging. A fourth type of lead generation is a hybrid and it applies to social media. Having a LinkedIn, Facebook, Twitter, Google+, or similar profile allows people to connect with us that we can get to know over time. It still requires people to take the first step, but then we can develop a relationship with someone before ever discussing whether they can do business with us or provide referrals. Don t trust anyone else to tell your story The primary reason that purchasing sales leads doesn t work is that quite simply those companies aren t us. Even our own salespeople aren t us, but they are closer than a service company that we ve never met. Who is in a better position to tell our story than us? Who know what our ideal referral is? Who can spot a potential led and develop that into a customer or client or determine that it is not a good fit and move on? For anyone else to help us generate business by identifying and cultivating sales leads, they have to know what we re looking for. An impersonal service company that just has leads for sale can t do this because they won t have had any interaction with us prior to placing an order with them. An employee that we use to help us generate leads won t be able to do this on day one either. We will need to educate them and bring them along until they can tell our story effectively. Then they will know better about who to look for as a potential customer or client. 8 Whitepaper: Why You Shouldn t Pay For Sales Leads Steve Hoffacker

9 Regardless of which hat we wear salesperson, sales manager, or business owner we know what we sell. We know who is an ideal referral for us and who isn t. We know what we re looking for in a potential purchaser or someone who can led us to that person. Why would we entrust this special skill that we have to anyone else? It s our business. It s our talent. It s taken us months or years of experience to gain this insight. How can we delegate this important function to anyone else? We are the best person to know what we need and to go after it. It s our business, and a lead generation service cannot understand our needs. You have tremendous potential Rather than looking for a shortcut which saves us neither time nor money to help us identify sales leads, we should use the talents that we already have. Even if we are new to our current company, just started a new business, or recently changed product or service lines, we still have a following and a network. Also, everyone has a circle of friends and relatives no matter how small or large. These two factors give us all the resources we need to start being a successful lead generator. There are essentially two main places to look for and identify potential sales leads (1) our circle of contacts that includes family, friends, and acquaintances, as well as people that they know that they can refer to us and (2) total strangers, including people that we know of or know by sight but have never met. So how do we approach them and what is our message? First things first. 9 Whitepaper: Why You Shouldn t Pay For Sales Leads Steve Hoffacker

10 For family and friends, including people that we haven t spoken to recently, they just need to know what we are doing currently. If and when the conversation turns to how they can help us, that s fine. Initially, however, we just want people to know what we re doing, where we re doing it, and what our basic product line is. Then we can get into what type of a client or customer we ve looking for and whether they can recommend anyone including themselves. For tips, insights, strategies, and examples of how to approach family, friends, acquaintances, and others that we know, get a copy of one of my books written specifically for generating our own leads with people we already know as well as their friends: Using Your Network: Making New Home Sales With People You Already Know for onsite new home salespeople and custom home builders and Mining Your Database: Making More Sales Through People You Already Know for remodeling contractors, handymen, builders, architects, designers, occupational therapists, and other providers of aging-inplace solutions. Taking your potential on the road Starting to build a set of potential sales leads with our circle of contacts is a good place to begin because they know us and should be willing to help us. We don t need to sell ourselves or our credibility before they agree to help us. We already have some relationship with them. After acquainting them with what we are doing now or reminding them for those who already knew we can move right to the part where we want their help. The second way to generate leads for our business is with total strangers or with people we have not been introduced to even though we might know who they are by sight or name. 10 Whitepaper: Why You Shouldn t Pay For Sales Leads Steve Hoffacker

11 This is potentially a limitless number of people because we constantly are meeting new people in our daily comings and goings. Whereas the main approach for talking with family and friends is to make sure they are aware of what we are doing, the main approach for beginning to work with strangers is the introduction. We just need to meet them and exchange names and contact information. There is no pressure attached to the initial meeting other than having some polite conversation, letting them know what we do, finding out what they do (if we don t already know), and paving the way for additional conversation later. After we meet strangers, they are similar to people we already count in our circle of contacts, and we can begin to cultivate a relationship that might lead to a sale or referral or both. For tips, insights, strategies, and examples of how to approach and meet strangers, get a copy of one of my books written specifically for generating our own leads with people we are meeting for the first time: Making New Friends: Connecting With Strangers To Make More New Home Sales for onsite new home salespeople and custom home builders and Filling Your Funnel: Building Your Business By Reaching Out To Strangers for remodeling contractors, handymen, builders, architects, designers, occupational therapists, and other providers of aging-in-place solutions. Make it work We really have two choices in generating new business wait to see who contacts us through the advertising and promotion that we do (or our company does for us), plus any incidental referrals that might come our way through typical word-of-mouth, or do something about it by talking directly with people 11 Whitepaper: Why You Shouldn t Pay For Sales Leads Steve Hoffacker

12 to learn who has an interest in purchasing what we offer (or might know someone who does). The intentional route will be the most dependable and rewarding. It takes time but is far more dependable and relatively free to conduct. The results are far more reliable that using traditional marketing. In typical marketing where the message is introduced to the marketplace for someone to see or hear, identify with it, and then contact us, we still have to sell ourselves and our opportunity. With intentional marketing where we are contacting specific people one-at-atime either those from our circle of contacts or those we are meeting as we do life we are already building a relationship with them about who we are and what we offer. The hard part of building the sale is over. Now it s on to meeting their needs. Never settle for the traffic that comes through our door, calls us on the phone, or contacts us by . It s important, but it likely is not enough to sustain us. We can have more, and we can do it for ourselves. Don t look for shortcuts. Fee-based lead generation services are not for us. We should do our own prospecting, and reap the results while maintaining control of the process. steve@stevehoffacker.com Whitepaper: Why You Shouldn t Pay For Sales Leads Steve Hoffacker

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