As I am preparing this column, the Overture pay-per-click search engine has discovered that three consulting firms are willing to pay in excess of $6 for any user who searches for the keyword "MAS90" and subsequently clicks on their advertisement, which brings them to their Web site.
What is striking is that this $6 is paid regardless of whether the company doing the clicking buys anything! If you figure that perhaps one in 20 clickers are potential tire-kicking "suspects," that brings the cost of a raw Internet lead generated via these top bidders to somewhere around $120 (and one in 20 might be a very optimistic figure).
If companies are willing to pay so much to steer an Internet visitor to their site, they must be making money, right?
It depends. Companies that pay considerably higher are ones that I call "consolidators, which generate sales leads for multiple resellers. And there are two primary ways to generate leads via the Internet.
Purchasing leads from a "consolidator"
A dozen or more consolidator Web sites have sprung up solely to gather leads and resell them to consulting companies who pay a fee per lead. These sites typically purchase paid positions on Internet search engines so that they’ll rank higher and have a better chance of attracting visitors.
Their sites offer lots of information on different software packages. Typically, if you purchase leads from a consolidator, you are one of six or more similar firms chasing the same prospective client.
Consolidators, who sell leads, are the perfect solution for many smaller consulting companies who lack the resources to generate leads on their own. For a fixed fee per year, you typically get a guaranteed number of leads that have been generated from the consolidator’s site.
The biggest downside to using consolidators is that to be profitable and keep the cost per lead low, they must sell each lead to multiple firms. This may not be a problem in rural areas where few consulting firms compete for business. However, in large metropolitan areas like Los Angeles or New York, the prospect of chasing a lead that six other consulting firms have also purchased is none too exciting.
If you decide to use a consolidator, look for one that does some lead qualification prior to distributing their information. Several have set up entire departments that will call the prospective client prior to sending the name out as a lead.
Also beware of lesser-known consolidators. I have noticed at least one that appears to be double-dipping. They sell leads to consulting firms and then, in another business, sell discounted accounting software - which seems to be a conflict of interest.
Over the next year as the marketplace improves, these consolidators will likely fade into the sunset. Only the larger and better-organized firms will remain as consultants recognize that purchasing leads from a consolidator is the electronic equivalent of chasing a highly competitive request for proposal.
Generating your own leads
I favor generating my own leads for two reasons: it offers significantly less competition and, when done consistently, is much cheaper per lead!
Once a prospective client finds my site, I can move quickly and often close the business before they investigate another reseller.
My top three methods of generating Internet leads are:
1. Internet search engines. Internet search engines have evolved to the point of where you need to pay in order to be listed high. The first page of search results is where you need to be displayed. Both Google and Overture are search engines that accept paid listings. They also serve as the paid search engine for several other popular sites.
Because these two engines partner with various other sites, listings on both Google.com and Overture.com will get you prominently displayed in all the major search engines that your prospective client may use.
Don’t forget several important items to include on your Web page, so that prospects know what you do and how to get in touch with you.
Phone number & mailing address. This is important and is often overlooked. An 800 number will get 10 times the calls of a local phone number. If your business is primarily generated by companies in close proximity to you, then skip the toll-free number and you’ll limit the number of out of state inquiries.
E-mail link. Make it easy for visitors to e-mail you questions about your services. Always include a form that a prospective client can fill out to request more information. Ideally, you should create several different packages of information that you offer for free on your site. These packages could be articles you have written or complete white papers on topics of interest to the prospect.
Content. Make it clear within five seconds exactly what your company does and what you specialize in. Do not make prospective clients hunt all over your page to discover your services. Making sure that each of your Web pages adequately describes your service also helps greatly in ranking your page higher in any of the free search engines.
2. Internet News Groups. Newsgroups are electronic message boards where users can post questions and wait for other users to respond with answers. Participating in them can be highly lucrative, as some of my most loyal and highest-paying clients have found me through message postings that I had made to an Internet news group.
Unfortunately, I have not found news group participation to generate a large quantity of leads. However, the leads it does generate are almost 100 percent closeable and highly profitable. If you participate consistently and in a non-sales manner (don’t constantly ask for prospects to call you for a paid consultation) you’ll soon find that, over time, many of these prospects will retain you for paid services.
As a resource use
3. E-mail Newsletters. Every encounter you have with a prospective client should begin with a request for an e-mail address. Also make sure that you have every existing client’s email address, as well. E-mail is an extremely low cost and effective way to generate leads from prospective and existing clients.
Make sure that your e-mail newsletter goes out monthly and that it does more telling than selling. Over time you will notice an increase in people responding to your newsletters with requests for further information on the services that you offer.
As a resource use
The Internet as a lead source is quickly overtaking traditional lead generating methods, such as direct mail and Yellow Pages advertising. Be sure that you make finding your site as easy as possible for prospective customers.
