Case Study – The Potential Impact of Lead Generation Tactics on a Small Business

hour-glassRecently I conducted a survey amongt small business owners, asking them, “what are the biggest barriers to conducting various lead generation tactics?”  (Lead Generation Tactics for Resource Limited Small Businesses, Feb 11, 2009).  A quick overview of the results showed:

 

- 76% of our poll respondents said “they” are in charge of executing lead generation programs.

- 34% of our total respondents said “Time” is the biggest barrier to conducting more lead generation tactics.

- 60% of the respondents stated webinars, case studies/article and blogs are the most difficult lead generation tactics to execute.   

- 60% of the respondents cited “Time” and “Lack of Expertise” as the reasons small business owners did not leverage these tactics.

 

I provide the full set of the blinded survey and poll data here (you will be asked to provide some basic info to access and download the results).  

 

roi  Is making the time (or buying the time) worth it?  Before answering that question, business owners must take a long term ROI view when ascertaining the risk and reward of a lead generation investment.  The following is a quick example (call it a mini-case study) on the potential ROI webinars can make on a small business’s sales and lead generation effort over 4 years:

 

Mini-Case Study: The Impact of Webinars on Lead Generation

 

I. Webinar Frequency and Reach

Frequency:  2 webinars over 60 days

Resulting Attendance: 176 registrants, 80 attendees (estimates)

New Clients (Sales) = 3 (1.7% of total registrants) *

 

* The number of New Clients will vary based on various factors including the average revenue per new client (see III. Revenue New Sales).

 

II.  Risk/Costs

Direct Costs: $400 total (telephone and web charges)

Indirect Costs: $8,000 (time spent by you, your marketer and/or a contractor)

Total Costs = $8,400

 

III.  Revenues/New Sales

Revenue per New Client = $10,000

Annual Retention Rate of Clients = 70%

Growth Rate Per Client (% Increase/Yr) = 15%

(try replacing my hypothetical #s with your own numbers for Revenue/New Client, Retention Rate and Growth Rate per Client to asses your business’s potential ROI)

 

IV.  Results/ROI

New Revenue in Year 1 = $30,000 (3 new clients x $10K)

One Year ROI =  257%

 

Retained Revenue (Years 2,3,4) = $45,990 

Growth Revenue (Years 2,3,4) = $6,898.50

 

Total Revenue (Years 1,2,3,4) = $82,888.50

Four Year ROI = 887%

 

Special props to Wellesley Hills Group who outline this concept very well in their report entitled Making Lead Generation Work for Professional Services.

                                               

V.  Intangible

Revenue does not take into account the estimated 20% of webinar registrants who are new “leads” for business and may eventually become clients in future, further adding to the positive ROI (approximately 34 of 176 registrants in this case).

 

VISummary
The answer to the question “Is it Worth the Time?” is a resounding YES!   The impact of well thought marketing programs will vary depending on your business, your database, etc.  However, invariably the short term and long term ROI of a well planned and executed lead generation program will make a positive impact on sales, and serve as a foundation for additional revenues for years to come.

 

Other good posts that resulted from our webinar and poll entitled Lead Generation Tactics for Resource Limited Small Businesses are:

9 Tools Marketers Need in their Toolbox

20 Ways to Trigger a Groundswell for Your Viral Marketing Content

 

And Mark Your Calendar for March 11 at 12 PM EST for the next Marketing Studio Webinar: Leveraging Twitter to Grow Your Small Business.  Check out the All-Star panel we have by clicking here.

 

Contact me if you would like to learn more on how I can help save you time by helping with the planning and execution of your small business’s lead generation program.

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18 Responses to Case Study – The Potential Impact of Lead Generation Tactics on a Small Business

  1. Hesha Patel says:

    ROI calculation

    Hello Eric- shouldn’t the ROI for 1st yr in the above scenario be 357% and not 257%?

    30,000/8400 * 100 = 357%

  2. Eric Glazer says:

    I used the following formula for ROI:

    ROI = (30000-8400)/8400 = 257%.

  3. Hesha Patel says:

    Oh Yes- obviously I didn’t have my thinking cap on!

  4. Jyll Heiden says:

    Eric – great study! Have you polled any of your respondents with respect to using a CRM to manage leads?

  5. Eric Glazer says:

    Jyll, yes, most are not using a true CRM tool…I will try to over this in a future webinar…obviously as your organization becomes more of a lead generation machine, simple Outlook folders or Excel files will be insufficent tools to maximize the value you can derive from your own database.

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