Lead Generation – what is it good for?

There are lots of companies that provide lead generation services for businesses looking to increase their customer numbers.  I get emails like this on a regular basis:

Hey Tim,

I was just checking out HOOLOCK CONSULTING LIMITED, I’m the Managing Director at Company X.

I can assist your business with gaining new clients each month using successful outreach systems. Shall we discuss this further?

If this is typical of their lead generation process, then I doubt that they are going to be very successful.  It certainly does not attract me to want to work with them.  Just knowing that a company offers a specific service is not sufficient to encourage another to work with it.

However, there are lots of companies doing this so they must be getting customers and making money some how.  To understand this a little more, I ran a poll on LinkedIn recently, asking the following question:

What is your experience of lead generation companies?

This was the range of responses:

I used them, they were great                                       0%

I used them, not so good                                              55%

I might use them                                                              0%

I will never use them                                                       45%

It is not exactly a ringing endorsement of them!  Some comments that were made included:

“They hugely over commit and severely under produce.”

“I am sure it's not the case for all but I think a lot work on quantity not quality.”

There are a number of problems that I see with lead generation being done for you by another company:

  1. From my experience, it takes the best part of six months for a sales person to get completely comfortable with the products and services that they are selling.  A lead generation company cannot possibly understand what you are selling and the best way to approach this in a very short time.  How can they possibly manage to effectively promote your business if they do not understand it?  If they are going to understand it, how long will it take you to explain it to them?

  2. Whenever I am cold called, the caller barely takes the time to acknowledge me before launching into a pre-written script.  They make no effort to build some rapport or even to check if you have the time to talk to them.  If this is how lead generation works, then they are not creating a great impression of your company which is something that you really should care about.

  3. Whenever I do this for myself, I start with a list of about 50 people to call, start at the top and work my way down.  If I talk to more than 1 in 10 of these people, I think that I am doing well.  People are either out or busy in meetings or you just get no response.  Even when you do get a response, at least one person says “I don’t accept cold calls” which quickly ends that conversation!

If you do manage to talk to someone, the chances of them realising that they need your services are less than 1 in 10.  You simply cannot work with those odds.  To be successful, you need to make the person that you are talking to think differently about their work.  They will only be interested in your product once they have made a decision to change something about their business and they can only do that by learning something new.

Lead generation can work.  However, to be fully effective, you or someone in your company needs to be doing it.  It is simply too difficult to rely on a third party to do it for you.  If you are going to do it, ensure that you follow this simple formula for success:

  1. Introduce yourself, explain how your company can help and ask for permission to talk;

  2. Tell the potential customer something that they do not know that might affect their business;

  3. Explain how this information will affect their business, either good or bad;

  4. Ask for a longer meeting.

Your sole focus of a cold call should be to get a meeting.  If you try to sell your product, you will struggle.  You simply want to get to the next stage of the sales process which is typically a longer, hopefully face-to-face, meeting.

However, you are generating new leads, you need to be doing it continuously to feed your opportunity pipeline.  Without new opportunities, the business will start to dry up and that’s when panic sets in and you engage a lead generation company because they promise great results!  Do a lead generation in small amounts every day and you will be more successful.