Growing your list and generating leads is great – but do you know how valuable each one is to your business?
And if you do, do you know how to increase that value?
Knowing the value of each lead allows you to calculate exactly how much you should spend to acquire it online and the more your leads are worth, the greater the return (ROI) will be for your business.
The question is, how do you increase the value of your leads?
We will take you through five fundamental ways to drive more revenue from each lead you capture online.
We’ll break them down into actionable steps that you can take in your business to help fine-tune your lead generation and get the biggest return on every new subscriber you collect.
By focusing on these five steps and bolstering up your marketing practices to make the most of each lead, you’ll position your business for long-term sustainable growth.
Let’s get started in building your business:
Improve Your Targeting
Do you know who your customer is?
What are the characteristics of your current customers. By this we mean your top customers. That group of customers that bring you the most sales.
The 80/20 rule.
Of the past 50 leads that you collected – how many actually became a paying customer?
How many made a repeat purchase from you?
How many just kept on receiving your emails and reading your content and made no move to spend money with you?
Seeing new subscribers roll in is fantastic but you need your subscribers to do more then just read your content.
You have to get them to take action.
To take your business to the next level means you’ve got to raise the bar for your incoming leads.
Growing your list is great, but it’s the quality of your leads that is important to you. That is what building your business is about.
Healthy businesses are those with hyper-focused targeting and high-value offers that speak directly to a narrowly defined target audience that is (1) most likely to be interested in what you’re selling and (2) value it enough to make a purchase (..and then another purchase, and another, and another).
By improving the targeting of your digital advertisements, you can ensure that your message is going to the right people at the right time and, as a result, increase the value of your leads.
Whether you are using Facebook Ads, Google Ads, LinkedIn, You Tube or any other advertising platform you need to be confident with your targeting.
For most people who are running PPC campaigns, be it B2B or B2C, the main cause of poor leads/sales is improper targeting.
If you don’t know who your customer is, then your targeting mistakes are going to affect a lot of the other downstream aspects of your campaign.
By really knowing your customer you can then use the information to better target your campaign, so that the right people see your ads.
You can also use the information to write better copy within your ads and landing pages
Increase Your Prices
Setting the right prices for your products and services always causes a number of issues for small business owners.
They fear that if they set the price too high then no one will buy, and if they go too low they may end up making very little profit and their business becomes a burden not something they enjoy running.
By pricing too low you will only end up with customers who are just price shoppers. They will just look for the lowest price. Competing on price is the quickest way to go out of business.
Choosing the right pricing strategy for your business isn’t easy, but it is relatively simple.
Price is essentially composed of two elements: the marketplace (what are people willing to pay) and what goes into making that offering in the first place (to cover your costs).
For many small business owners, under-pricing a core product or service can be a costly mistake.
Most small businesses make the mistake of setting their prices way too low. And that’s somewhat understandable because;
Small business owners are eager to get more customers and don’t want price to be a barrier to making a sale. To draw an imperfect parallel – this would be akin to a ‘people pleasing’ pricing strategy – you want to be friends with everyone, only to wind up depleted and surrounded by dreary folk.
And it comes out of a deep-seated fear that says ‘if I set the price high, no one will buy.’
That’s true. Not everyone will buy – and you don’t need them to. You can build a business on a core group of customers that you go above and beyond for.
If you hope to build a long-term business, you need quality customers who are going to stick around and pay a fair price for what you’re putting out into the world.
Think of it this way: growing businesses are those that bring in more and more revenue year over year.
You can do that in one of two ways: (1) by increasing the number of products you sell or (2) increasing the price point.
Most small businesses aren’t able to produce their core products/ services at scale
Therefore, raising the prices of your core offerings is an excellent way to ramp up the revenue stream.
Here’s some points to think about:
Compete Elsewhere: When your primary competitive attack is on price point, your long-term revenue will likely suffer. You want to avoid trying to out-price the competition because rather than focusing on adding value to your customers you’ll be focusing on cutting costs and dazzling them with dirt-cheap discounts (for mediocre products).
Start by Shooting for the Stars: If you’re testing the market with a new product/ service, aim high before you aim low. You might very well be surprised what your audience is willing to pay – give yourself the chance to find out! Worst case scenario, you can always come back with the same or similar offer at a lower price point.
Boost the Value then Bump Up the Price: If you have an existing product/ service that your followers are already familiar with, it’d be ‘uncool’ to simply jack up the price on a whim. If you’re going to ask people to pay more, you have to back it up. Consider how you could tweak your existing offering (even slightly) to add value, and represent that value in a higher price tag.
Risk Raising Your Prices: Consider raising your prices and closely monitoring your conversion rate. Your company’s core product likely benefits from price elasticity: the ability for your conversion rates to stay relatively the same even when you raise your price by 10-50%.
Improve Your Customer Lifetime Value
Customer Lifetime Value (CLV) measures the average profit you earn from a customer during the time they remain a customer of your business.
Lead generation is often focused on capturing the lead and prompting that first sale. They click ‘checkout,’ you hear ‘cha-ching!’ – and then what happens?
Of course, the first sale is something to celebrate, but the more products/ services you can sell to a single customer, the more revenue (and profit) you’ll earn over the course of that customer’s lifetime with your business.
Acquiring new customers is a costly activity for most businesses and selling to those same customers year after year after year is where the true business growth kicks in.
Finding clever, constructive ways to increase your customer lifetime value is an excellent way to increase the value of your leads.
Ask yourself: Do you know what the average customer spends over his or her lifetime with your business? Does your current product line end too soon?
If so, you should consider adding another product or a higher level of service to your mix.
You can do that by tuning into your customer’s needs and closing the gaps between their problems and your solutions.
Take a closer look at your customer support tickets or schedule conversations with your best customers to explore how you might be able to deliver additional value.
Once you discover your customer’s unaddressed problem, you can decide to go one of two routes:
Fill the gap with your own product/ service (by developing a fresh, new offer)
Partner with a third-party business who is better equipped to meet their needs (and who is willing to share a % of the revenue with you in exchange for a referral. This is known as affiliate marketing).
If you can increase your customer lifetime value from $100 to $200, you’ve doubled your lead value as well.
Improve Your Lead Nurturing Sequence
At the end of the day, leads are only valuable to your business if they convert into paying customers.
Increasing your conversion rate by as little as a few percentage points can have a drastic impact on your business. For example: If your product sells for $200, and your conversion rate is 2%, your lead value is $4. If you can increase your conversion rate to 4%, your lead value doubles to $8.
Practice Good Hospitality: Nurture Your Leads
Even though everything happens across a computer or smartphone screen, lead nurturing should always be viewed as a human-to-human, one-to-one interaction.
You’ve introduced yourself online, maybe pitched a piece of valuable help, and now you’ve got a new lead: someone who says, ‘ok, I’m interested enough to continue this conversation…sounds like you may be able to help me.’ And now they’re inside your email list, waiting to see what happens next.
What happens next should be a carefully constructed path of communications in which you deliver thoughtfully curated content that delivers value, upon value, upon value – and sprinkles in a few upsells and offers along the way.
This is where the terms ‘content marketing’ and ‘customer journey’ truly come into play.
You’ll need to demonstrate an awareness of who you’re talking to & what they need, as well as an ability to meet that need in the form of free content. You found a stranger, captured a prospect, and are now converting that prospect into a customer (for life).
Why? Because this is what it takes to be in business: a consistent dedication to improving your conversion rate and boosting the value of your leads.
Here’s what we recommend:
Nurture New Subscribers: Check on the email series you send to new subscribers. Are your messages relevant to their initial request, or are you dumping them into a generic newsletter series?
Play the Long Game: Don’t go straight in for the sales pitch. Instead, spend a little bit of time optimizing your email sequence with a focus on delivering free content in order to gain value and establish trust. Thoughtfully bridge the gap between what your lead has downloaded for free and the product or service that you’re hoping to sell to him or her in the future.
Improve Your Sales Conversions
Another way to boost your conversion rate for sales (and therefore elevate your lead value) is to improve your sales page (sales-oriented landing page).
Write landing pages for target customers, not all customers
A great sales pages has several leverage points for higher conversions. Optimizing for each one can pay off big dividends.
Here’s what to do:
Write a Killer Headline: Does your headline scream, “I’ve got to have that!” or does it come up (sadly) short? Your headline should focus on the ultimate benefit/results that your target audience is seeking and should entice your audience to click and learn more.
Be Clear About the Benefits: Throughout your sales page, are you showcasing the features of your product through the lens of “what’s in this for me?” For each primary element of your product or service, be sure to fully answer the “so what?” question that your prospects are thinking to themselves.
Provide Proof: Are you able to illustrate testimonials and case studies from previous customers that are relatable to your prospects? Adding 3-5 authentic testimonials to your page will boost your conversions, especially if those testimonials address common objections and fears that your target prospects have at the time of purchase.
Reverse the Risk: Can you offer a guarantee to make your product or service risk-free? This can take the form of a money-back policy (30-60 days is typically ideal), or a “we won’t stop until you’re excited about your results” type of promise. Adding in language that relieves the pressure of the buying decision in this way will boost your conversions.
Create a Sense of Urgency: The enemy of good business marketing is indecision. Use language on your sales page to compel a decision. Use a countdown timer before your offer expires or the price changes. Add extra value (in the form of bonuses for example) to your offer within a certain time frame.
How Will You Increase the Value of Your Leads?
You already know that acquiring new leads is one of the most expensive aspects of your marketing – so anything you can do to increase the value of your leads will lead to more revenue and improve the return on your ad spend (ROAS).
Here’s a quick recap of what we explored in this article:
5 Steps to Skyrocket the Value of Your Leads
Improve your targeting
Increase your prices
Improve your customer lifetime value (CLV)
Improve your lead nurturing sequence
Improve your sales conversions
Now it’s your turn: what have you done to increase the value of your leads? AND what one of these five areas are you committed to focusing on this month?
Remember as a business owner you should be focused on acquiring a customer not making a sale. You are after a long term relationship that works both ways between you and you customer.