This article is part of the Tommy Cat Media quick-fire series, which discusses key marketing concepts and applications tailored to specific industries.
Generating leads and new business is the lifeblood of most companies.
However, 61% of marketers say they struggle with lead generation. What makes it so difficult?
To run a successful lead generation program, you need to balance three factors;
- Quality of the lead.
- Cost of lead acquisition
- The number of leads acquired
Most smaller businesses can only manage two at once.
The following article will cover this concept, which we can label “The Bermuda Triangle of Lead Generation”.
Why do Companies and Marketers Struggle with Lead Generation?
Lead generation is not as easy as it seems.
Brands tend to settle with generating lots of leads that do not convert for them. They also focus on the cost of acquiring leads and try to find the cheapest acquisition methods. However, they find it very difficult to convert these leads because they’re so low quality.
Enter the Bermuda Triangle of Lead Generation – The Concept Explained
You can think of lead generation as a three-sided triangle with the points labeled quality, quantity, and cost. To achieve a perfect lead generation program, you must complete all three points of the triangle.
Quality – the lead needs to convert and drive revenue for your business.
Quantity – you need to generate enough leads to grow new business.
Cost – Lead acquisition cost should not exceed the revenue generated from the leads.
Unfortunately, most brands can only achieve two of the points. They run into the following scenarios.
- Generate quality leads that convert + large quantity of those converting leads = lead acquisition cost is expensive to continue running acquisition campaigns.
- Generate quality leads that convert + acquisition of those converting leads is not expensive = the quantity of leads is too low which makes it difficult to run a sustainable business.
- Generate large quantities of leads + acquisition of those leads are not expensive = the quality of leads is very low. The return on investment is nonexistent.
Achieving all three points of the triangle requires skill, perseverance, technology, and budget. Unfortunately, most small or medium businesses do not have these readily available.
Best Case Scenarios for Lead Generation
The best-case scenario for a company running a lead generation program is to generate quality leads at a low cost per acquisition.
It is imperative to create a nurturing funnel that gives these limited number of leads the best chance for conversion.
You have to milk as much value out of them as you humanely can. That means leads that convert for one product need to be upsold so they can purchase another product.
This needs to become a systematic process until you can routinely generate enough revenue from one lead that can necessitate more budget to acquire more of the same lead.
Brands That Have Mastered Lead Generation
Brands that come to mind that have mastered all three points of the Bermuda Triangle of Lead Generation are WebMd.com, Tripadvisor.com, and Amazon.com.
Major Players Own Their Niche or Vertical Which Makes Lead Generation Easier.
The common element for the three brands is that they promote an experience that positions them as owners of their niche.
For example, if you feel sick, you visit WebMD to look up your symptoms. If you need things to do on a trip, you most likely end up on Trip Advisor. If you want to buy something, Amazon will have it and get it to you by tomorrow.
They offer a Seemless User Experience That Does Not Feel Like Lead Generation
These websites do not ask for your information at the front. They do not have email signups or landing pages with forms.
They have created a tool or engine that is useful to a broad audience. Having a large target audience drives down the acquisition costs since the pool of people available to become a lead is larger.
The data inputted into these tools are collected and used to create a personalized user experience.
For example, WebMD has a symptom checker. The information collected in this tool helps WebMD generate a profile on you. They then use that information to refer you to a doctor that can treat your condition.
These tools also are very intent based as well. That means the users utilizing their website tools are actively looking for solutions to their problems. Generating a good quality lead.
These Brands Have Huge Advertising Budgets
Another similar theme with these brands is that they have large advertising budgets. Amazon 2021 spent 10.4 billion dollars on advertising. Today, most smaller businesses only spend 7-12% of their income on digital marketing. Not quite a fair advantage.
Conclusion
Conquering “The Bermuda Triangle of Lead Generation” is unfortunately not achievable by most businesses.
To run a perfect lead generation program, you need to be in a niche with a broad target audience or dominate a smaller one. You also have to build a unique tool that adds value to the target audience’s lives.
However, the silver lining is that you can settle for a best-case scenario. Always strive to acquire the best quality lead for the lowest acquisition cost. The revenue generated from these converting leads will yield bigger budgets available to get more similar types of leads.
