Balancing Quantity vs. Quality of Leads When planning your marketing efforts, should you cast a wide net to find lots of leads, or a narrow net to find highly qualified leads? Here's how to decide.

Editor's note: This article is excerpted fromMarketing Made Easy. Find it on EntrepreneurPress.com.

When setting up a marketing plan, the first planning decisionyou'll need to make is that of quantity vs. quality ofleads.

Should your time and money be spent in a concentrated fashion,courting a few potentially extremely valuable customers? Or shouldyou cast a wide net, spreading your contact information as far aspossible, in the hopes of catching a larger number of lessindividually valuable customers?

The answers depend on the stage your business is in, the breadthand sophistication of your audience, your price-point, and thecomplexity of what you're selling. For example, consider themarketing of expensive, complex items such as passenger jets ornuclear power plant turbines. The volume of prospective customercontacts generated by your marketing is less important thanreaching the correct high-quality contacts with a very deep andsophisticated marketing approach. For jets or turbines, relativelyfew people are critical to the purchasing decision. It's moreimportant to reach them than thousands of people who don'tmatter.

Conversely, for inexpensive, simple items such as MP3 players,volume of buyers is important. Marketing for maximum market shareand 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 wheneach marketing approach should take precedence, and what"taking precedence" actually entails in tacticalterms.

Quality (Higher Cost perLead)
When product price is higher, complexity of product or installationis higher, or value per deal is concentrated in a few larger deals,the quality of leads has a direct correlation to sales efficiencyand success. The valuable audience you need to market to willconsist of only a few specific individuals. In this situation,accurate targeting of marketing efforts is of more importance thanthe volume of contacts created. Why? Cost. It's likely that thepurchase process will be extensive and extended--that eachprospective customer will require customized, in-depth educationabout your offering and its benefit to them.

So it's important to expend marketing efforts on only thecorrect contacts. More research and planning time spent beforeprograms launch, and investment in higher-value marketing programsfocused on a select few individuals will result in morerevenue.

Consider these examples of how such tightly targeted marketingprograms might differ in implementation from moremass-market-oriented programs:

• E-mail: Instead of using mass-mail-mergeand large purchased generic lists, send a personal e-mail to thetarget contact from an analyst related to the target company, witha "cc" to the marketing or salesperson from your companybeing introduced. .
• Seminars: Don't hold large, anonymoushotel or stadium-based events; rather, arrange in-person meetingsor 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 yourcompany's CEO, on wedding-invitation-quality cards. .
• Materials: Instead of generic case studies,use specific examples as applied to the target company's ownsystems, cost structure, and environment, showing detailedknowledge and understanding of the most important issues, and howyour solution helps.

In sum, high-touch personal marketing will always improve thequality of your leads if initially directed at the appropriatemarket. But such marketing is expensive on a cost-per-lead basis.You won't be exposed to as many people, so success dependssignificantly on the ability to tightly define the target audienceprior to spending on them.

Quantity (Lower Cost perLead)
When the product price is relatively low, number of units sold isrelatively high, and individual deal size is relatively small,large numbers of sales must be made for the business to showrevenue growth. In these circumstances, your marketing goal shouldbe a lower cost per lead, so that you maximize the number of peopleyou reach on your fixed budget. Usually a quantity-driven producthas a short purchase process, and one where decision authority isminimally permuted within an organization: only one person needs tobe convinced of your product's value for you to make asale.

Marketing efforts can thus be relatively straightforward andminimally customized, using larger volume and lower cost-per-targetprograms. 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 byindustry.

With the above caveat in mind, allowing your marketing messageto depersonalize--to regress to the mean--can actually have abeneficial effect on lead flow, as your programs seek to attract asmany as possible of the specified (large) segments. Putdifferently, a specific message applies perfectly to a narrow setof individuals; a general message applies less perfectly toeveryone. So when choosing between quantity and quality, err on theside of quantity (within limits)--as by giving yourself moreoptions when selecting prospective customers, you will likelyincrease your overall revenue.

Why It Matters
More is not always better. Lead generation costs money, and if yougenerate too many leads--in that your ability to follow-up on leadsis overwhelmed--valuable leads are ignored and lost asopportunities.

Since the only thing worse than a prospective customer whohasn't heard about you is one who wanted to buy from you andwas ignored (as far as they could tell, you couldn't bebothered to contact them and take their money), you need to balancethe value of annoyed lost customers against nonacquiredcustomers.

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