Sales Lead Generation – What has the Best ROI?

The old maxim that “nothing happens in business until something is sold” could be extended to say “and nothing gets sold until a sales lead is generated”. Sales lead generation is an absolutely critical activity of any business. Until a business can generate a sustainable pipeline of qualified sales leads, its future will be in jeopardy.

1. Search Engine Optimization / Web Site Marketing – 8/10

In my experience, SEO is the very first place any new company should start when considering how to generate leads. It is the cheapest (comparatively) method of consistently generating sales leads related to a business. While the initial costs may be high, the long-term return on investment simply cannot be beaten by another other direct marketing method.

The disadvantage of SEO is that it can produce unqualified leads as there is limited ability to select your target audience initially.

2. Direct Mail – 4/10

While direct mail is often the first activity implemented by a new business, in my experience its success is questionable. Response rates are usually less than a half of one percent (don’t believe the research that show response rates of up to 5%, it simply doesn’t happen in white space).

When you consider that each direct mail piece will usually cost at least one euro to two US dollars, this can be an expensive activity that produces few results.

3. Email Marketing – 6/10

The holy grail of direct marketers! Cheap, easy to implement, and high volume. Unfortunately it is very difficult to obtain high quality lists for a particular sector that are not comprised of “generic” email addresses (info@, sales@, etc).

Nonetheless, when you eventually do find a good list, email marketing can be incredibly cost effective and produce very high return on investment. It is certainly worth the effort of trying to track down a good list.

My suggestion for email marketing software is Constant Contact (www.constantcontact.com) which we use regularly. It provides great reporting on click through rates etc, and also allows recipients the facility of opting-out of future contact, a very important part of email marketing.

4. Pay Per Click Advertising – 2/10

Pay per click advertising such as Google Adwords can be a quick way to reach your online target market. It does not require any of the advance work and time required that organic listing through search engine optimization needs.At the same time, it can be incredibly expensive. In my (and my clients) experience, very few click-throughs lead to inquiries, let alone sales. The response rates and costs are actually lower than direct mail.

Based on our experience, we give pay per click the lowest rating of any of the marketing tactics included in this article.

5. Telemarketing – 7/10

Although it can be quite expensive, telemarketing remains one of the most powerful marketing methods that you can use to build new business in “white space”. The ability to select the target market (unlike SEO or pay per click advertising), qualify the lead immediately (unlike any of the other methods) and progress an opportunity through the sales cycle means telemarketing can quickly generate success and win completely new business.

As it is probably the most expensive tactic discussed in this article, it is important to emphasise the importance of planning the telemarketing campaign well in advance. You must spend time testing the script, ensuring the data is accurate, training the staff (or outsourced telemarketing agency) and making sure that all results end up in a good CRM Software system.

About the Author
Michael Kelly is Managing Director of Ridge Marketing, a company that provides UK Telemarketing and Telesales solutions. The company provides telemarketing to all industries, and has particular expertise in the financial services and information technology sectors.