Dec 28, 2012
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The Best Kept Lead Generation Secret
The strategy I’m about to reveal is so simple, powerful, and obvious, it must be a secret. Why else would it be so underutilized? Done right, this method produces the best kind of leads, takes relatively little effort and financial investment, and continues to deliver a residual flow of hot inbound leads. But I’ll warn you too—Do it wrong, and you could waste a lot of time, and possibly tarnish your business reputation. In this post, part 1, I’m describing what the secret is and why these leads are so good. And in next week’s post, part 2, I’ll show you my recipe for success with it.
The Secret is “Natural Partnerships”
Imagine you’re a small business owner needing a tax accountant, and you decide to ask your friends for recommendations. You figure you can bypass the vetting process by getting a referral from someone you trust. So which of your friends do you turn to first? You probably wouldn’t start with your plumber. Instead, you’d ask someone like a bookkeeper, a corporate attorney, or a financial planner. Why? Because these professionals are likely to know several accountants, and know which to consider and which to avoid. There’s a good chance that tax accountants are part of their “natural network”, people they associate with on a regular basis in the course of their professional work. Whats more, these professionals are also in corporate finance, so they may know a thing or two about picking a good accountant. Ironically, your plumber may use the best tax accountant in the state. But my point is, you probably wouldn’t go to him first, nor would you fully trust his opinion because corporate finance is not his specialty.
Now change shoes and imagine you’re the tax accountant, and you’re looking for new clients. Wouldn’t it make sense to connect with as many bookkeepers, corporate attorneys, and financial planners as you possible could? These are your “natural partners”. These professionals are frequently asked for referrals to services like yours. Persuade them to send the referrals to you instead of your competitors, and you will establish a pipeline of hot inbound leads.
Natural Partners Give the Best Referrals
Most professional marketers would agree: If you had two nearly identical leads, the one that came in as a referral is better. Why? Because your referral didn’t require a piece of your marketing budget, the buyer makes her buying decisions quicker, she’ll take less effort to persuade, and she’s more likely to give a referral. Add it all up, and you’ve made an easy high profit margin sale. But referrals are not created equal. I believe that natural partner referrals are better than employee referrals and even client referrals.
Better than Employee Referrals
You and your employees have warm contacts all around you, and some could be interested in your offering. But these potential employee referrals have their weakness too. To illustrate, I consult a successful financial planning company that used to build they’re business entirely on employee referrals. They would recruit a middle aged professional looking for a career change, then train him to sell financial services to his friends, family, and business network. But the new adviser faces some serious challenges in this marketing model. The adviser struggles to close the deal because his warm contacts do not see him has a credible adviser. They may be impressed with his licensing and his recently acquired financial knowledge, but wasn’t he running a carpet cleaning business only three months ago? As much as you may like the guy, you would have more trust for someone who’s seasoned in the business. It comes back to credibility. You may trust him to watch your kids, but you probably don’t trust that he knows what he’s talking about in financial services.
What if the new adviser passes the lead to a superior, someone seasoned and more credible? A similar obstacle still arises. The prospect may say to himself, “I trust Bob, and clearly Bob trust this adviser. But how would ‘Bob the carpet cleaner’ know how to choose an adviser?” The referral may even think, “Clearly there’s something in it for Bob, so I should be cautious.” In contrast, if the new adviser were to connect to some credible accountants or insurance agents, he could leverage these professionals’ trust to make the sale. The trust is carried through because these professionals are part of Bob’s natural network.
Better than Client Referrals
Now let’s look at client referrals. I have a realtor friend that works entirely on client referrals. I was surprised to learn that he hates it. He feels obligated to work every lead sent his way even when the return is not worth the investment. He fears that if he doesn’t work the micro-deals with full gusto, his referral sources won’t send him the good leads down the road. And if he tries to tell his clients to only send him a certain kind of lead, they may go to someone else with the small deals building a relationship with another realtor. He can’t risk that, so he slaves away working frustrating loss-leader deals that cap his earning potential. I’d recommend he develop natural partnerships with builders, part-time agents, and mortgage brokers. These partners would likely already know what kind of transaction he’s looking for, and they can cherry-pick out the goods ones for him.
I’ve touched on a few ideas here. I invite you to consider how natural partnerships fit into your lead generation strategy. Feel free to comment or contact me for some personalized ideas. I enjoy the challenge. I have yet to find an industry that can’t benefit from this strategy. And next time, I’ll have a step-by-step plan laid out for you, and time permitting, a whitepaper for you to download with more details, ideas, and examples.