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What is Lead Generation & Why Does it Work?

In business, lead generation is the development of customer curiosity in regards to the goods or services of your company. In the end, we want to convert this curiosity into actual customer sales. You may have also heard this activity called prospecting, and it is a crucial part of any business. If you don’t have leads, you probably don’t have sales.  If you don’t have sales you don’t have a business.  A set of qualified prospects is a precious advantage for your own organization. It is inexpensive to build and functions well for every single type of company, including “dull” B2B firms.

Here are just two reasons why Lead-Gen is so important:

        1. It Builds Brand Recognition & Loyalty

Who’d you rather purchase from –  An unfamiliar brand that shows shoves promotions in your face or a business that you trust, that has continuously supplied you valuable information at no cost?

Most people would choose the latter.  Companies that work to build relationships with customers face a much easier time both closing sales as well as boosting the lifetime value of their customers.  Our customers at SixFive who have visited our site, read our articles, watched our videos, and engaged with our brand previously have a considerably higher LTV (we well as being a lot better to deal with) than customers who approached us without a relationship and understanding of what we do. Rand Fishkin at Moz noticed the same trend:

 “Those who visit organically and are part of our community (social followers, subscribed to our blog, getting the Moz emails, etc) tend to have a much bigger customer lifetime value (CLTV) than others”.

        2. It’s Cost Efficient

Getting someone’s email is easier and more affordable than attempting to close right from the start. It is an excellent way to start establishing a connection with a potential customer. Think of your connection with your potential customers as a romantic interest that you would love to be in a relationship with. The first time you talk to them you are not going to ask them to get married.  Take them on a couple dates, make sure you are looking for the same things, and when it is appropriate and feels right, pop them the question.  People are emotional creatures and also prone to push back against hard sells.  If you do it too early, you might wreck the relationship forever.
To bring this back to lead generation, let’s go through an example:

Direct Marketing

Price to Acquire a client: $25

Average Lifetime Value: $200

Lead Generation

Cost-per-lead: $1.25

Lead to Customer Conversion Rate: 20%

Price to get a client: $6.25

Average Lifetime Value: $300

Can you see the difference? Through lead generation, we can halve the price to acquire a consumer while also raising the revenue created by every client.



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(519) 854-6565


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