B2b Small business owners
How To Know If I Should Start B2B Lead Generation
John Welch
Owner | IAD Growth
In This Post
1. You have a working offer
In B2B companies, especially early on or if you're starting something new like a software company or a company in an emerging market or service type, it's easy to put the cart before the horse.
Having an idea and even closing a customer or two does not mean that you have identified a clear pain, solved that pain, and packaged an offer that is easy to understand and buy.
A powerful offer is the foundation of all lead generation. Without it, you're throwing darts at a wall of invisible dart boards and hoping a dart hits a bullseye somehow.
Your offer can be something very specific like a set of services for a certain price, some kind of monthly package, or a set of hours dedicated to a task or solving a problem.
It can also be something very broad like a consulting process that ends up looking different for every customer.
What is essential is that it is based on solving a very specific and easy to communicate problem AND it can be shared with some kind of price range and idea of an expected outcome or deliverable.
2. You have revenue or capital to invest
Many business owners and entrepreneurs turn to lead generation when they are in trouble. Or they try to start lead generation in order to prove their business model. These are both mistakes.
Lead generation is a process that only makes sense once you have a clear offer that fits a clear market and you have demonstrated evidence that you can sell your offer in this market.
This usually means that you have active customers and either have regular revenue that you can allocate to lead generation, or you've accumulated capital and have a fund that you can put towards lead generation.
If lead generation stands between you and closing your doors, it's not a good idea.
3. You know your numbers
There are a couple specific scenarios in which this doesn't apply, but for almost 100% of companies, they shouldn't try lead generation if they don't know their numbers.
Knowing your numbers is pretty straightfoward. This means understanding how much, on average, you make in revenue and profit from a new customer over their lifetime as a customer. This number needs to be high enough to justify the investment that you're making.
It takes time and money to get results from lead generation. Knowing the value of a customer and how much profit you stand to make over a certain period of time tells you how much you can invest in acquiring a new customer.
This calculation can look very different for different companies depending on a lot of different factors.
A software company may have 90% profit margins and an average customer lifetime of 2 years. This means they can justify a significant cost to acquire a new customer. Another company may have 20% profit margins and an average customer lifetime of 6 months. This company is going to have a different calculation on how much it can spend to acquire a new customer.
In general, the math works out for the type of business and their profit margins. But you can't give lead generation the time and investment it needs to succeed if you don't have a clear idea of what a new customer is worth and how much you can spend to acquire them.
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Honest and transparent phone call lead generation for B2B companies
IAD Growth provides phone call lead generation services to startups and small busineses. Our primary focus is transparent, sustainable lead generation services that give small businesses and startups the opportunity to generate real business results through a low-risk, no pressure lead generation partnership.
John Welch | Owner
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