It's been a really interesting week here. I've been working on a new project developing a prospecting list for one of the verticals we've been ramping up outreach for, and I was reminded about a very critical point that I wanted to share with you. It has to do with what I personally believe is one of the single most important skills that anyone who's responsible for developing lead flow in their business must posses. And that's the ability to build accurate and highly-relevant prospect lists and advertising audiences related to your market.

I've seen way too many business owners invest in prospect lists to acquire contact data, and then immediately start reaching out to, or advertising to, these lists. And that's a huge mistake. 

The problem with buying lists, or outsourcing to a virtual assistant - or even hiring a "professional" list builder - is that they're most often focused on volume. And what you should be after - is accuracy, and relevance. I'd rather have a list of 2,000 prospects who I know are a 95% match to my ideal avatar, than a 10,000 person contact list that is only a 70% match.

When it comes to lead gen, and building your prospecting lists - I always recommend focusing on highly targeted, well researched leads, over massive lists. No doubt about it.

I know you've been told time and time again that prospecting is a numbers game - and it is (to some degree) - I mean, more activity (or visibility), results in more business - true. But... greater relevance, results in less activity required to generate the same (or a greater), result. And that's where the gold is - right? When you can do less work, and produce more revenue - that's what we're after. And it all starts here.

Over the years, I've learned to spend far more time researching, and eliminating prospects before starting outreach, or a marketing campaign. This time is much better spent, than being "in the trenches" trying to contact as many people as possible.

I'll take a small list of prospects that have been through three rounds of scrubbing, over a massive list with "endless opportunities" any day of the week.

And outbound marketing is one thing. But the same holds true for Inbound marketing. If you have an ad audience of 2,000 of your best prospects - and you run ads to them, you'll find that it's likely to perform much better than a campaign that goes out to 10,000 prospects that haven't been qualified as well.

The reason here is that ad platforms want to reward advertisers who provide a great experience for their users. You may be the one paying the bills, but these platforms care more about the end-user than the advertisers. Sorry to break that to you (if you didn't already know).

So your campaigns to the smaller, more highly targeted audience will get better engagement, more reactions etc. - and the ad platform will see this and reward you with lower CPM's, cheaper clicks, and less expensive conversions. It's a win for the ad platform; a win for their users; and a win for you.

So - always keep filtering your prospecting lists, and audiences until you believe you have a highly relevant data set. Now of course it needs to be large enough to be useful, but you can always add more prospects.

In the rest of the episode, I'll go into a bit more depth about our current project, but you'll have to listen in for those details... 

I hope this all makes sense - but at the end of the day, when your building out your prospecting lists or marketing audiences, take the time to do it thoughtfully, and pay attention to every person you add to your list. Are they really a good fit, and do you feel like you know enough about them yet. Put a little extra focus in this early stage of marketing development, and it will pay dividends later on. 

Hope this helps! See ya' next time...

In speaking with so many business owners every week, I tend to hear a lot of the same questions over and over. The one that comes up most frequently is in fact: "How much should I be spending on lead gen?" Now, what makes this so interesting, is that despite the fact that I speak with businesses of varying sizes, the answer is always the same: 

Your lead gen "budget" should be determined by two simple things:

1. Your goals as a company, and your ability to fulfill the projects you sell - and...
2. What your competition is doing.

That's it. Your goals/capacity, coupled with the competitive landscape, equals your proposed marketing budget. Let's dig in just a bit more.

Ok, first - it seems obvious that your goals matter here - right? I mean, if you're a small business owner, closing in on retirement, and just want a stable business - you're lead gen strategy will be much different than if you're a young company looking to aggressively grow and become the dominant player in your space .

But, what's most important, for the businesses I work with, is their capacity. The last thing you want to do, is invest marketing budget into generating jobs you can't do (or do well), that will ultimately leave you short handed and over stressed. This also leads to dissatisfied customers and negative reviews, which can be damaging to a business. We definitely don't want that. 

So, start by determining your capacity, and work your lead gen plan back from there.

In the audio, I give a detailed example for a paving company, to illustrate this point. 

Now, the second factor that determines our required budget, is competition. Many businesses think that the ad platforms determine ad costs - but that's not really the case. Most ad platforms nowadays run on an auction based model - meaning that the advertisers (you and your competitors), determine ad costs. The ad platform charges only what the highest bidding advertisers agree to pay. So what does this mean to you?

Well, it means that as more advertisers enter a market, or as businesses are able to make more money per customer (by increasing the customer's lifetime value), ad costs will increase. I've covered this on previous episodes, so I won't go into too much detail here, but let's just agree, that in every market - ad costs increase over time, and eventually, there become only a handful of "strong" businesses who get the vast majority of the available customers each month. These are the businesses who can pay the most for a customer. 

So you just need to be aware, that as competition increases in your market - your marketing budgets will need to be adjusted too. This can happen slowly - or  all at once (like if a new franchise with proven marketing systems starts moving into your service area) - so you need to be constantly aware of what the competitive landscape look like in your market.

These are really the biggest factors to consider when trying to determine how much you should spend on lead gen. Sure, there are a hundred other micro-factors, but in reality - get super clear on, and monitor these things, and you'll have no trouble knowing that your marketing budget is on point.

Today's episode is all about the importance of Lifetime Value (LTV) when it comes to lead gen strategy. Now, a lot of people think the lifetime value of your customers is something you measure and think about after you get lead gen dialed in - but that's simply not the case. Whether you're a new business, or a well established business - in order to properly launch an effective lead gen strategy - you need to already know what your average customers are worth - not "right away", but over the course of their relationship with your business. 

Businesses that base their acceptable customer acquisition costs on the value of immediate sales will always lose to those businesses who factor in Lifetime Value when deciding what they're willing to pay for leads - and eventually customers. Almost all "pay to play" platforms nowadays are auction based models - meaning that you (and your competitors), determine what your going to pay for visibility. Most platforms have enough inventory for only a handful of "winners" in any segment of a market. So if you're a cleaning company using Google Ads to acquire customers in the Greater Boston area - you might be competing (or bidding against), 10-20 other cleaning companies and half a dozen lead companies. Although there may be 30 or so total advertisers bidding for that traffic, only half a dozen or less are likely getting any significant customer flow because of limited page one inventory, and search volume etc. (there's lots of factors that play a role here). 

In our experience, 80% or more of the total available customers each month are probably going to 3-4 of the "real businesses". These are the businesses who: provide the best user experience in their advertising; have the best social proof; the strongest offers; and who are willing to spend the most - there's just no way around it. 

Now many of those factors you can control - like providing a great user experience by using proven ads and creatives, driving to a great offer on a direct response marketing funnel etc. And you can work to get more positive reviews than any of your competition. But you can't spend more unless your business model supports it. Meaning, if the LTV of your average customer is $350 - but your competitors are able to maintain a $550 LTV - they'll always be able to outspend you, and capture more market share - allowing them to grow month after month, while your business remains flat.

So what do you do? It's simple: put a focus on increasing LTV of your average customer.

There are an unlimited number of ways to increase LTV, but let me spur your thinking with our current example of a cleaning company. You could offer additional services that you don't already offer. You could change your pricing model to charge for extra bathrooms, larger kitchens etc. You could incentive customers to get on recurring programs. You could do better email marketing and run monthly and season promotions if you're not already. You could sell gift cards and get your current customers to become a referral engine for your business. You could partner with other related, but non-competing businesses and earn referral fees - maybe partnering with someone who does grout replacement, heating and air conditioning vent cleaning, laundry services etc. The point here, is that with a little creative thinking you'll see there are always dozens of ways to add additional revenue streams for any business - and hence - to increase your average customer lifetime value. 

When each new customer is worth more to your business - you can invest more to acquire those customers, and ultimately - become the leader in your space. Because you've probably heard it said (I believe the original quote was from Dan Kennedy), that whoever can spend the most to acquire a new customer wins - and I know it's true.