Editor's note: This article is excerpted from Marketing Made Easy. Find it on EntrepreneurPress.com.
When setting up a marketing plan, the first planning decision you'll need to make is that of quantity vs. quality of leads.
Should your time and money be spent in a concentrated fashion, courting a few potentially extremely valuable customers? Or should you cast a wide net, spreading your contact information as far as possible, in the hopes of catching a larger number of less individually valuable customers?
The answers depend on the stage your business is in, the breadth and sophistication of your audience, your price-point, and the complexity of what you're selling. For example, consider the marketing of expensive, complex items such as passenger jets or nuclear power plant turbines. The volume of prospective customer contacts generated by your marketing is less important than reaching the correct high-quality contacts with a very deep and sophisticated marketing approach. For jets or turbines, relatively few people are critical to the purchasing decision. It's more important to reach them than thousands of people who don't matter.
Conversely, for inexpensive, simple items such as MP3 players, volume of buyers is important. Marketing for maximum market share and end-consumer awareness creates success.
To understand the tradeoffs, consider:
- Quality (higher cost per lead)
- Quantity (lower cost per lead)
- Why the tradeoff exists and matters
Understand those three aspects, and you'll understand when each marketing approach should take precedence, and what "taking precedence" actually entails in tactical terms.
Quality (Higher Cost per
When product price is higher, complexity of product or installation is higher, or value per deal is concentrated in a few larger deals, the quality of leads has a direct correlation to sales efficiency and success. The valuable audience you need to market to will consist of only a few specific individuals. In this situation, accurate targeting of marketing efforts is of more importance than the volume of contacts created. Why? Cost. It's likely that the purchase process will be extensive and extended--that each prospective customer will require customized, in-depth education about your offering and its benefit to them.
So it's important to expend marketing efforts on only the correct contacts. More research and planning time spent before programs launch, and investment in higher-value marketing programs focused on a select few individuals will result in more revenue.
Consider these examples of how such tightly targeted marketing programs might differ in implementation from more mass-market-oriented programs:
- E-mail: Instead of using mass-mail-merge and large purchased generic lists, send a personal e-mail to the target contact from an analyst related to the target company, with a "cc" to the marketing or salesperson from your company being introduced. .
- Seminars: Don't hold large, anonymous hotel or stadium-based events; rather, arrange in-person meetings or small executive-level forums or individual lunches. .
- Direct mail: Instead of generic postcards, send direct mail via FedEx, with a personal note from you, as your company's CEO, on wedding-invitation-quality cards. .
- Materials: Instead of generic case studies, use specific examples as applied to the target company's own systems, cost structure, and environment, showing detailed knowledge and understanding of the most important issues, and how your solution helps.
In sum, high-touch personal marketing will always improve the quality of your leads if initially directed at the appropriate market. But such marketing is expensive on a cost-per-lead basis. You won't be exposed to as many people, so success depends significantly on the ability to tightly define the target audience prior to spending on them.
Quantity (Lower Cost per
When the product price is relatively low, number of units sold is relatively high, and individual deal size is relatively small, large numbers of sales must be made for the business to show revenue growth. In these circumstances, your marketing goal should be a lower cost per lead, so that you maximize the number of people you reach on your fixed budget. Usually a quantity-driven product has a short purchase process, and one where decision authority is minimally permuted within an organization: only one person needs to be convinced of your product's value for you to make a sale.
Marketing efforts can thus be relatively straightforward and minimally customized, using larger volume and lower cost-per-target programs. Standard marketing programs might include:
- E-mail to lists purchased from magazines or trade shows.
- Webinars or open seminars by city.
- Direct-mail postcards.
- Mass-produced materials, with generic case studies by industry.
With the above caveat in mind, allowing your marketing message to depersonalize--to regress to the mean--can actually have a beneficial effect on lead flow, as your programs seek to attract as many as possible of the specified (large) segments. Put differently, a specific message applies perfectly to a narrow set of individuals; a general message applies less perfectly to everyone. So when choosing between quantity and quality, err on the side of quantity (within limits)--as by giving yourself more options when selecting prospective customers, you will likely increase your overall revenue.
Why It Matters
More is not always better. Lead generation costs money, and if you generate too many leads--in that your ability to follow-up on leads is overwhelmed--valuable leads are ignored and lost as opportunities.
Since the only thing worse than a prospective customer who hasn't heard about you is one who wanted to buy from you and was ignored (as far as they could tell, you couldn't be bothered to contact them and take their money), you need to balance the value of annoyed lost customers against nonacquired customers.
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