The 5 Types of Lead Generation, and The Order You Should

I've been thinking a lot about marketing/lead generation lately and the way people go about implementing it, especially in new businesses.

Although there’s many ways you can categorize and define different lead generation strategies, I think all strategies fall into one of five main categories:

Ø Content Marketing (blogging, podcasts, free downloads etc)

Ø Advertising (PPC, banner ads, Yellow Pages, sponsoring an event etc)

Ø Referrals (recommendations from existing customers and other people)

Ø Outbound (cold email, cold calling)

Ø Partnerships (joint ventures, affiliate marketing etc)

Each has advantages and disadvantages.

In an ideal world you would be implementing strategies which fall into most or all of the five categories. The more channels you have for acquiring new clients and customers the healthier your business.

But the reality is that most entrepreneurs and small businesses do not have the resources to pursue multiple strategies at once.

Many small businesses survive on referrals alone.

The strategies you should focus on depend on the resources available to you.

I’ve listed the five categories above roughly in the order of popularity, but the order of implementation and optimization should be as follows:

Ø Referrals

Ø Outbound

Ø Content Marketing

Ø Advertising

Ø Partnerships

·       Referrals

Referrals are an excellent source of new customers. They are the easiest leads to turn into new customers because when one of your existing customers refers them to you you gain a lot of credibility, and they typically have a pressing pain that you can solve.

To generate referrals you need to do two things.

Make sure your current customers are happy.

Ask for referrals.

You should concentrate on referrals first because making your customers happy is the foundation of any business, it takes very little time and effort to ask for referrals and you don’t have to have a fantastic sales process to close leads generated by referrals.

If you’re a new business you might be thinking “How do I generate referrals when I have no customers?” Referrals do not have to come from customers. A great place to get your first few customers is from contacts you’ve networked with, relevant online communities, and even friends and family.

·       Going straight to content marketing or advertising is a bad idea

Many businesses go straight to content marketing or advertising when trying to grow their business beyond just referrals.

While they can both be great sources of new customers, they have significant disadvantages.

Content marketing is a very long-term investment. It can take years to get going (especially for a smaller business with limited resources and experience), and is unlikely to be a consistent source of new customers for some time.

Advertising is expensive. Even though you can spend small amounts of money at a time with strategies such as AdWords, it can take a long time to figure out exactly who your ideal customer is, your messaging and your advertising funnel. It also typically works in tandem with content marketing. Figuring all this out can take a long time, and over that time small daily amounts can add up to significant expenditure before you can profitably generate customers through advertising.

·       Outbound Strategies

After mastering the basics with referrals, implementing an outbound strategy will provide you with the most benefits for the least effort.

Compared to advertising, it is much cheaper. There is nothing to spend money on except perhaps a virtual assistant (about $500/month).

Compared to content marketing, it pays off much sooner. You can put in place an automated email strategy in a week, or less if you already have an assistant who can manage the process. There is a learning curve and it will take some time to get your targeting and messaging right, and optimize your campaign, but it will still be vastly faster than a content marketing strategy.

I’ve previously written a step-by-step guide you can follow on on how to implement a basic automated email outbound strategy here:

http://hvsdigitalmedia.com/bulk-email-services.html

Mastering an outbound strategy will also prepare you for effectively implementing content marketing and advertising strategies. It will force you to define your ideal customer in detail, and get your message across effectively. Without these two ingredients, any outbound, content marketing or advertising strategy will fail.

The benefit to figuring this out in an outbound campaign is there is a very tight feedback loop; you’ll know very quickly if something isn’t working, and you can do so without spending money on advertising.

Thoughts?