I was recently emailing with a solo consultant who contacted Credo about becoming a customer on the supply side of our business. Basically, they want to get more digital marketing leads in their door.
I hear this a lot, so I went to their website to poke around. Seeing a few concerning things which I messaged them about (and which turned out to be on purpose but a really bad user/conversion experience), we got into a discussion.
As happens with many consultants, I asked him how many leads he needs per month. I got back a response I have also heard a lot:
“I just need to close 1 every couple of months at $X,XXX to pay my bills”.
Now, let’s look at this real quick. And I don’t mean this as a knock in the slightest against the consultant, because they’re being honest with me and actually speaking to the metric that matters – clients.
I’ve always said “Leads cost you money, clients make you money.”
He said he needs one new client every couple of months at $X,XXX because that’s what makes ends meet for him because he and most consultants are usually working with a few retainers and the occasional one-off audit or similar to fill in gaps of availability.
And he’s right, but that’s also overlooking the fact that his leads are all currently direct inbound referrals from friends and those close at an incredibly high rate. From data I have seen, referrals like this close at 70-80% when the provider pitches the project.
Once you start to expand your lead sources out from personal referrals though, everything changes. Just like when a company goes from 2 to 5 people and everything changes, and then again to 20, and then again to 80, the same thing happens with sales when you layer on a new source.
Stacking your lead channels
With all the talk out there about lead generation and how to do it, and especially “how to scale it”, I’m amazed that no one is really talking about the effectiveness of various channels or how to approach it.
Everyone talks about “how to scale referrals” or “how to scale inbound”, but the reality is that when you take my approach to lead generation you don’t need to think about massive scale that maxes out that channel.
In fact, I believe in effective channels where you’re 80-85% of the way there. It’s Pareto’s Principle that you get 80% of the results from 20% of the effort. Sometimes it’s called the 90/10 rule (90% of the results from 10% of the effort).
Either way, I’m lazy and like to get the biggest return from my effort and then move on. I don’t like living life on hard mode, and following Pareto’s Principle is a great way to get out of the hard mode mindset.
All that said, the most effective way to do lead generation is to divide it up into levels and then stack them.
This is why I call it the Lead Generation Ladder, because you start at the bottom with the first step and then take each additional step as you’re ready.
The Lead Generation Ladder
Here is how the Lead Generation Ladder works:
There are four (4) levels to it:
- Owned properties
- Paid channels
Now, there will definitely be people who disagree with me and say that freelancers can be very successful on true marketplaces like UpWork or Freelancer. I’m not disputing that.
I am also not speaking to “true” freelancers, who are basically selling time for dollars and almost always billing by the hour. I actually don’t really believe in hourly billing except in very few circumstances (and have a very specific way of billing if I do). Freelance platforms can work very well for projects that are a few hours here or there at sub-$50 rates, but they do not work well for specialist senior consultants and agencies.
This Lead Generation Ladder is for two specific groups. Those I’d call:
Consultants are solos who are working on high-ticket projects for clients, and these require a sales process because the price is high enough as is the investment.
Agencies are multi-person entities that are usually providing some combination of consulting and services, and the scope of work tends to be more complex and timelines necessarily need to be longer to see results because of all the various moving parts, which takes more onboarding time.
Let’s talk through each level of the ladder.
Referrals are the bottom of the lead generation ladder. They’re not at the bottom because they’re the least effective, but rather because they’re fundamental to getting a consulting/services business of any sort off the ground.
Some do this when they’re still working a full time job. Others do it when they’ve gone out on their own.
If you are reading this then you’ve likely already been in or are in this phase. It’s when your friends in the industry, or similar industries, refer people your way because you’re great at what you do, they like and trust you, and they’re speaking with people who need what you offer.
Referrals are notoriously hard to scale and that’s for a specific reason – they’re built from relationships. And relationships are hard to build and take time to do well, especially to the point where others will refer work your way.
To make (friend) referrals work for you, there are a few cardinal rules you need to follow:
- Build relationships with others in your field. I find this is often best done by going to events, conferences, and being active on social media. Building your own personal brand through blogging/social media/speaking is a cheat code to meeting others.
- Tell others what you are doing and when you have availability. If they don’t know that you’re actively consulting then they won’t refer people your way, and if they don’t know that you’re actively taking on clients then they’ll refer people to you a lot less. Many consultants have just 2-3 clients at a time, so it’s likely you’re often quite full and thus they’ll refer you less often. There’s no shame in telling others you have an opening.
- Offer a referral fee or send them something nice in appreciation of a client. I’ve had people send me bourbon as a thank you, and I’ve sent referral fees to many (pre-Credo). I’ve also offered them quite a bit and had people decline.
The only way to grow referrals is to talk a lot about needing clients, or to know a lot more people. It’s not a channel you “scale”. It’s a channel you use to set the base so you can move on to bigger things.
Referrals are always going to convert the best. Of qualified referrals (meaning they need what you offer and you pitch them and they’re ready to sign), you should close 70-80%.
Next up is owned properties. I tell every consultant and agency that their website is their online home, and if their online home is bad then they’re not going to win projects.
It would be like a high end architect living in a really ugly house, and expecting it to generate them architecture clients. Potential leads aren’t going to trust them as much, and they won’t close nearly the volume or the caliber of clients they want or need.
If I had a dollar for every time I’ve heard “yeah, but you know cobbler’s kids and all” or “yeah I’ve been meaning to work on that, but haven’t had time because I’ve been working for clients”, I’d be retired.
These are excuses. It’s not the cobbler’s kid’s who have no shoes – it’s the poor cobbler’s kids who have no shoes. If you’re working for clients so much that you don’t have time to update your site (which probably will take you an hour to improve substantially), then you are probably not charging enough and don’t have the margin in your business to set you up to scale.
At it’s base level, your website needs to communicate four things:
- Who you are
- What you do/offer
- Who you do it for
- How to get in contact
That’s it. It’s that basic. Without these things though, you’re not going to convert the traffic coming to your site at anywhere close to the rate you need.
Then you need to generate leads through your owned properties. My preferred way to do it is via content and SEO, but those are also my specialties. You can also do it through partnerships or even paid acquisition (though for most, probably not the best way to do it).
It is usually relatively easy to track these versus referrals, as most referrals won’t fill out the form on your site yet most coming to your site relatively cold will (unless you ask them to email you as the call to action, which I wouldn’t recommend since you can’t track it in Google Analytics).
These leads should convert pretty well, though not as well as referrals. For these leads, you should target 30-40% closed when you pitch.
Once you’re converting leads through your owned properties and you want to think about growing your lead volume (usually when you’re hiring a team), now it can be time to turn on the paid channels.
Or, if paid acquisition is your jam, you can use paid to more quickly generate leads than can usually be done when just starting content marketing and SEO.
The channels you use are up to you. I don’t care if it’s Google, Facebook, Instagram, LinkedIn, or Quora. They can all work with the right strategies; you should use the ones you know or that you hear from others are working well for their business.
Or, the ones where your competitors are actively spending!
These leads will not convert as well as organic and you’ll have to do a lot more qualifying than the organic leads. You should target 20-25% closes on projects that you pitch.
Now that you’ve gone through the channels we have already talked about, you are probably ready to start using a service like Credo (or similar) to get new inbound leads. Some will just sell you contact info, whereas others (like Credo) will vet them to an extent before making the introduction.
There are quite a few reasons why you probably won’t see success with a platform or paid service before this, and it’s not just about the channel. It’s about what you’ve learned along the way.
Through referrals, you learned how to talk about what you do and get others to notice you and send people your way. You’ve built a book of business and hopefully some case studies and testimonials.
Through owned, you’ve tightened your messaging and improved your online presence so that you are findable and professional on your own. This is a huge factor to leads from platforms/paid services converting.
With paid (or scaling SEO/content), you’ve learned how to qualify in good leads and qualify out bad leads so that you’re spending time focusing on the right people. Not every lead is good and you should be qualifying them out, and you learn that in this scale phase.
Once you start using a service like a Credo, you are clear on who you are, what you do, who you do it for, and know how to take them from a lead or qualified lead to a prospect and finally a client efficiently.
What questions do you have about the Lead Generation Ladder?