As we start off 2021, we’re all going full force into growing our businesses, attracting the right clients and getting more leads and sales.
In this blog post we’re going to cover the 3 different types of leads you need in your business, how to easily work out how many leads you should be aiming for each month and how to convert those leads into paying clients!
But what really IS a ‘Lead’?
Is it a name and phone number? An email address? A comment on a Facebook post or an email asking for your prices?
The answer is all of them - but there is way more to it than just that!
It used to be that a ‘lead’ was an physical enquiry into your services (for instance someone emailed or called you asking for more information about your service).
Nowadays, a lead is much more than that.
A lead can be a comment on a Facebook post, Instagram photo, tweet, or simply a new subscriber to your email list.
Yep, that’s right - every single person who subscribes to your email list is a potential customer, therefore they are a new lead! See how important growing your email list is? If you want more tips on how to do this, read this post, then come back here!
The key word here is 'potential' as not all leads will convert into paying customers. There are also different types of leads - hot, warm & cold leads.
Let me explain…
A Warm Lead is someone who already has some knowledge of your company or brand and has had some interaction with you.
For instance, they may follow you on Facebook, Instagram, Pinterest, Twitter or LinkedIn. They may also be part of your email list, or you may have spoken to them at a networking meeting, seminar or event and they expressed interest in your product or services.
Remember that these people are only warm leads if they are in your target market though - if they're not your target customer who may buy your product or service, then they are not a warm lead and there is no point going any further with them!
A Cold Lead is someone who doesn't know about your business / brand, has had no interaction with you in the past, but IS in your target market.
These people still want what you are selling, but they don't know about you yet.
This is who you would be targeting to grow your email list, for instance.
People who are cold leads are super important to your business in order for you to grow and scale, so don’t forget about them!
Your ‘hot’ leads are typically clients you have worked with before, ideal clients who have purchased your online course, bought from your online shop or worked with you in some way before.
Usually, this means they are anyone who has paid you money previously.
Hot leads are usually far easier to convert again if you offer them a product or service they need as they already know, like and trust you, PLUS they have had the amazing experience of working with you already.
Would you love to know how to turn your leads into paying clients who really want to buy from you?
It’s actually a lot simpler than you may think! And the best bit, is that when you convert your new leads into paying customers the right way, you’ll actually be providing a much better service and experience, so it’s win-win!
Before we get on to discussing the process for converting your leads (and I’m going to share my 5 Psychological Triggers to Convert Your Leads into Paying Customers in just a few minutes) let's first take a look at what it really means to convert a lead!
A 'conversion' is any action you define. For example, it could be a purchase, phone call, form submission or social share.
The higher your conversion rate, the better you are doing at speaking to and connecting with your target audience via your marketing and strategy.
Here are a few conversion rates you might want to look at and track:
Your conversion rate here is represented by the percentage of website visitors who took an action on an offer (ie a product / service) you presented to them.
A really important conversion rate to track and measure is the percentage of people who saw your lead magnet and provided their name & email address in exchange for it.
There are several different conversions here that you may want to track! The main ones being the number of people who signed up for your webinar, the number of attendees and the number of sales made on the webinar.
You could also track how long people watched for and how many people purchased your products or service via your email sequence after the webinar ended.
It’s also handy to keep an eye on the percentage of email subscribers are clicking on your offers or links within your emails. You can test what types of CTA’s work best too.
Obviously, this totally depends on what type of conversion you’re looking at, but for this example, let’s take a look at Landing Page Conversion Rates…
The average conversion rate (the percentage of people that go from looking at a landing page to entering their info) is around 2-6%, depending on what industry you're in.
So if your conversion rate is coming up between 2-6%, give yourself a pat on the back! If it’s higher than that, you’re doing awesome!
In this report from Unbounce, they analysed over 64,000 landing pages across 10 popular customer industries and this is what they found:
“Generally, a 12% conversion rate is pretty good for lead generation landing pages. And by “pretty good,” we mean you’ll be better than about 90% of your competitors.
Something to bear in mind though…
As long as your Conversion Rate is better than the last one, you’re on the right track! Don’t stress about it too much!
...is your Lead To Sale Conversion Rate
To figure out how many of your leads are becoming paying clients, there is a very simple formula you can use.
In the example below, we're going to assume that a 'conversion' means they purchased a product or service, i.e a 'sale'
Let's say you had 100 leads come in last month.
20 of those leads went ahead and purchased your products / services
This means you had a 20% Lead to Sale Conversion Rate.
This is the formula:
Conversion Rate = Total Number of Sales / Number of Leads X 100
If you were tracking signups from your lead magnet, it would look like this:
Conversion Rate = Total Number of Signups / Number of Leads X 100
Let's say you sell a service that costs £2000. Would that lead be worth £2000? Not quite! Here's why:
In reality, only about 2 in every 10 leads become paying customers. As we just discussed, this means then that your conversion rate is 20% (2/10 X 100 = 20).
Therefore, from 10 leads, you can expect to make about 2 sales, giving you £4000 (2 sales @ £2,000 each).
So, to work out how much each lead is worth to you, use this formula:
Lead Value = Value of Sale / Number of Leads
Using the formula above, we can work out that your lead is actually worth £400 (4,000/10).
Still with me? We’re almost there!
It's a great idea to know this so you can figure out how many leads you need per month to make your desired monthly income.
This is the final formula (promise!):
Conversions Needed = Desired Revenue / Lead Value
Remember, this formula doesn't take into account your expenses (i.e your profit, rather then your revenue), but it's a great one to get started with!
So, if your goal is to make £10,000 per month, you would need:
25 Leads per month at £2000 each (£10,000 / £400 = 25)
5 Sales per month (£10,000 / 2,000 = 5)
From this, you can see that you need a lot of leads to make enough sales each month, right?
So now you understand more about the different types of leads in your business (hot, warm & cold), how many leads you need per month and what sort of conversion rates you should be tracking!
Now it’s time to start looking at how to convert those leads into paying customers!
As human beings we all want the same thing - to ease pain and to get pleasure. Those pain points and pleasure points are different for everyone which is why knowing your target audience is so important as an entrepreneur.
By using these two basic instincts of human beings, you can tap into your clients mind and help them to see how your service can benefit them.
The best thing about these five psychological triggers is that they aren’t ‘conversion-specific’, meaning you can use them on your landing pages, sales pages, website, emails, Facebook marketing and so much more.
Let’s have a look at those in a bit more detail…
One of the quickest ways to put someone off you or your business is to speak in a way that your target audience doesn’t understand.
It’s simple - people don’t want to feel stupid!
By using terms or language that your potential customer can’t relate to will not only make them feel inadequate, but also uncertain and hesitant to commit to you.
In all your marketing, be sure to use words that your audience relates to and even better yet, use words and phrases that they say themselves!
Whether this is through storytelling or understanding, ensure that you make a connection emotionally with your reader / viewer as early on as possible.
Explain how you felt when you went through what they are going through now and how you came out the other side of it. If you can’t personally relate to their problem, tell the story of someone else who has been in a similar situation.
Connecting emotionally with your audience is also about building real relationships with them. This is where the power of social media comes in, and why it’s so important for your business and brand.
Get to know the members of your Facebook group and the subscribers on your email list - always remember that these are real people, with hopes, dreams and fears.
Have you heard of the Xerox Experiment?
Here’s how it goes:
Harvard University member Ellen Langer & her colleagues a simple experiment to examine how people waiting in line to make copies at a Xerox machine would react to someone who wanted to “cut” the line and jump to the front of the queue.
In doing so, the experimenters used three different modes of request to gauge how those ahead of them in line would respond:
“Excuse me, I have five pages. May I use the Xerox machine, because I’m in a rush?”
“Excuse me, I have five pages. May I use the Xerox machine?
“Excuse me, I have five pages. May I use the Xerox machine, because I have to make copies?”
Which sentence do you think performed better?
When the first sentence was used, 94% of the people in line, perhaps not surprisingly, agreed that the person could cut to the front.
Only 60% of the people in line responded favourably when the second phrase was used.
Amazingly though, 93% of those people allowed the researcher to cut in line when they simply said, “Because I have to make copies.”
...which is rather strange when you think about it! Everyone is there to make copies!
Simply using the word ‘because’ and giving people a reason why (any reason why!) is enough to trigger a more positive response.
Scarcity, FOMO, fear of missing out - it’s something we all suffer from!
Just this Christmas, I was sitting round the dining table playing games with my family and having a glass or two of wine.
It didn’t take long for the box of Cadburys Heroes to come out and get offered round.
Now, I wasn’t hungry and didn’t actually fancy a chocolate at all (shock horror I know!) but I took two chocolates anyway and put them to one side. I even said “I’ll save these for later before they’re all gone!”
At the time, it was just a little thing, but looking back at it now, you can see that it is FOMO in all its glory!
Now, chocolate may not be the most important thing for your business (unless that’s your product!) but you can see how fear of missing out is an automatic, almost subconscious reaction for human beings!
Likewise, using genuine scarcity in your marketing can evoke the same feelings and help to improve your conversion rates and turn your new leads into paying clients.
Which leads us nicely on to my final psychological trigger which is a huge one.
Did you notice what I said about using scarcity? I said to use genuine scarcity.
Being genuine, honest, upfront, open, credible and trustworthy is imperative. Not only for your well-being, or to get great customer feedback, but also to offer peace of mind for your audience and customers too.
There are many ways you can show your credibility and trustworthiness to help turn your leads into clients!
You could use written testimonials, have a previous client share their results via a video, or a current client share their experience working with you.
Social proof is also a great way to go! Every time someone says something great about you or your product / service, on Facebook, LinkedIn, Twitter etc, take a quick screenshot and use those on your website, landing page or in your emails.
So that’s it!
You have my five psychological triggers to help you turn your leads into paying clients, you know how to track and measure your conversion rates and what to aim for!
What are your lead generation strategies for 2021?
How will you convert your leads into paying customers? I’d love to hear your favourite strategies so let me know in the comments!
“The cost of being wrong is less than the cost of doing nothing.
— Seth Godin
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