Balancing Quantity vs. Quality of Leads

When planning your marketing efforts, should you cast a wide net to find lots of leads, or a narrow net to find highly qualified leads? Here's how to decide.

article is excerpted from Marketing Made Easy. Find on EntrepreneurPress.com

From article:

The answers depend on the stage your business is in, the breadth and sophistication of your audience, your price-point, and the complexity of what you're selling. For example, consider the marketing of expensive, complex items such as passenger jets or nuclear power plant turbines. The volume of prospective customer contacts generated by your marketing is less important than reaching the correct high-quality contacts with a very deep and sophisticated marketing approach. For jets or turbines, relatively few people are critical to the purchasing decision. It's more important to reach them than thousands of people who don't matter.

To understand the tradeoffs, consider:
· Quality (higher cost per lead)
· Quantity (lower cost per lead)
· Why the tradeoff exists and matters

Quality (Higher Cost per Lead)
When product price is higher, complexity of product or installation is higher, or value per deal is concentrated in a few larger deals, the quality of leads has a direct correlation to sales efficiency and success. The valuable audience you need to market to will consist of only a few specific individuals. In this situation, accurate targeting of marketing efforts is of more importance than the volume of contacts created. Why? Cost. It's likely that the purchase process will be extensive and extended--that each prospective customer will require customized, in-depth education about your offering and its benefit to them.

Quantity (Lower Cost per Lead)
When the product price is relatively low, number of units sold is relatively high, and individual deal size is relatively small, large numbers of sales must be made for the business to show revenue growth. In these circumstances, your marketing goal should be a lower cost per lead, so that you maximize the number of people you reach on your fixed budget. Usually a quantity-driven product has a short purchase process, and one where decision authority is minimally permuted within an organization: only one person needs to be convinced of your product's value for you to make a sale.

Why It Matters
More is not always better. Lead generation costs money, and if you generate too many leads--in that your ability to follow-up on leads is overwhelmed--valuable leads are ignored and lost as opportunities.
Since the only thing worse than a prospective customer who hasn't heard about you is one who wanted to buy from you and was ignored (as far as they could tell, you couldn't be bothered to contact them and take their money), you need to balance the value of annoyed lost customers against nonacquired customers.