A Lead Magnet is one thing that every single business needs to have - if they don't they are missing out BIG TIME! Let's delve deeper into what a Lead Magnet is and why you should have one!
Before I get into Lead Magnets, I want to clarify what a 'lead' actually is.
A 'lead' is an inquiry, referral, obtained through advertisements or other means that identifies someone as a potential paying customer. The key word here is 'potential' - not all leads will convert into paying customers. There are also different types of leads - warm & cold leads. Let me explain...
A Warm Lead is someone who already has some knowledge of your company / 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.
Note that these people are only warm leads if they are in your target market though - if they're not the kind people who buy your products or services, 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.
What are Conversion rates?
A 'conversion' is any action you define - it could be a purchase, phone call, form submission, social share etc.
Unbounce analysed over 64,000 landing pages across 10 popular customer industries and this is what they found:
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. Here's a great visual from Unbounce:
Lead to Sale Conversion rate
To figure out how many of your leads are becoming sales, 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
So how much is each lead worth to me?
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.
So your lead is actually worth £400 (4,000/10).
Here's the second formula you need to know:
Lead Value = Value of Sale / Number of Leads
Still with me?
So, why do we need to know all this information?
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
Note, 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 you needed to generate £10,000 per month to sustain your business, 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?
Well, that's where your Lead Magnet comes in!
What is a Lead Magnet?
A lead Magnet is something you give away for free in exchange for an email address. You want those email addresses so you can market to your target audience via email.
Lead Magnets can come in a variety of forms, such as:
- Audio file
- Free Guides..
Here's a few more Lead Magnet ideas:
A Lead Magnet should be laser-focused and specifically created for your target market. They should be short and sweet, not take you too long to create and not take the person receiving it too long to read / watch / listen to!
The tip for a killer lead magnet is to ensure you're not overwhelming your prospect, but you are creating and giving huge value with a focus on easily achievable results.
Why do I need a Lead Magnet?
Here's the kicker:
If someone follows you on Facebook and Facebook crashes, or they close it all down, you have no way to follow up and keep in touch with your community of followers.
The same thing goes for any social media platform. The information you have on there belongs to them, NOT YOU.
You also need to bear in mind that algorithms change all the time and your reach & engagement can significantly drop - again, leaving you by the wayside.
Your email list is YOURS. No-one else owns it or can take it away from you. The only way it's ever going to disappear is if you delete it or someone unsubscribes.
Did you know that email marketing converts 3 TIMES BETTER than social media? If you want to create an awesome lead magnet and get more people on your email list, join the 5 day challenge here!
This is because, when done correctly, your email list is filled with people in your target market who want your products & services and who know, like & trust you already! they are the best warm leads you can ever have!
How can a Lead Magnet help my Business?
Lead Magnets are totally awesome, and every business, not matter how small or large you are needs to have at least one. Many businesses have many more lead magnets to target different people, products or services.
Lead magnet are simple and easy to create, when you know how to do it!
So what are the benefits of using a lead magnet to generate more leads and sales?
1. You'll understand what your target audience REALLY WANTS from you
2. You'll start or grow your email list
3. You'll increase your visibility in your industry
4. You'll increase your visibility with your target market
5. You'll position yourself as an expert in your field
6. You'll create authority and build trust
7. You'll get more leads
8. You'll attract new customers
9. You'll make more sales
10. You'll make more money
11. You'll help your target audience & they will LOVE you for it
Where do i put my lead magnet?
The obvious place for your lead magnet would be on your website, but this can happen in a variety of ways, such as your blog, homepage, 'above the fold' on a page, as a promo banner or a pop-up.
You can also share your lead magnet in a ton of different places, such as Facebook, Twitter, LinkedIn, Stumbleupon, Inbound, Quora, YouTube, Pinterest etc.
Also, don't forget to mention it at your networking events and have somewhere for people to sign up for it at wedding fairs or exhibitions you attend or showcase at!