Rachel saw an ad for a natural health product. It piqued her interest, so she called the toll-free number and asked for a free catalog. She gave the customer service rep her name and address, and in so doing, Rachel became a lead. She can expect to receive more brochures and coupons from this company in the future.

Ben went to the website of a marketing firm he had heard about. On the website, he noticed a free resource called “How to Write Better Headlines.” Ben was interested in this topic because he wrote most of the ads for his company. He entered his email address into the form, which gave him access to the resource. In doing so, Ben became a lead. In the future the marketing firm can now contact him via his email address.

Kevin and Sue were on the way home from the doctor’s office when Sue noticed a billboard featuring a mattress store. “Let’s stop there,” she said, turning to Kevin. “Don’t you agree that our mattress is getting worn out?” Kevin and Sue became leads when a saleslady warmly welcomed them into the store.

In marketing terminology, a “lead” is someone who is potentially interested in your product or service. If you aren’t sure whether the person is interested or has the necessary budget, they are referred to as an unqualified lead. A qualified lead is one that you not only know is interested, but also fits your description of an ideal customer.

Components of a Strong Ad

What is lead generation?

Lead generation is about getting more people interested in your products. It is any activity that identifies potential customers for your company. Then, after a lead is generated, you can communicate with them to convert them into a paying customer.

Take a moment to think of all the different ways someone might find out about your company:

  • Seeing your ads
  • Seeing your product in use
  • Driving by your store
  • Searching online
  • Hearing from a friend
  • Noticing your job sign
  • Visiting your booth at a trade show
  • Receiving a call or visit from your salesman
  • What are some other ways people learn about your products and services?

Looking at the list above, we can identify some lead generation tools:

  • Ads
  • Product labels
  • Storefronts and signage
  • Websites and online ads and reviews
  • Your current customers (through referrals)
  • Job signs
  • Trade show booth/collateral
  • Your salespeople
  • What other lead generation tools are you using?

The cost of lead generation

While we all want new customers, we know they don’t usually come free. For example, advertising in traditional media—magazines, newspapers, direct mail—can become quite expensive.

Some lead-generating methods, though, cost very little. When one of your satisfied customers refers a neighbor to your business, that is a free lead! It costs you very little when someone calls you after seeing the nameplate on one of your products at a friend’s house.

While you won’t be able to completely avoid paying for new leads, you can think creatively about ways to get leads more inexpensively.

Here are two examples of how other businesses found low-cost ways to reach new customers. A clothing store stood next to a large grocery store that served many customers every day. The clothing store arranged for the store clerks to insert a brochure into every grocery shopper’s bag.

In another example, an accounting software consultant arranged for an accountant to recommend his consulting services to his clients.

Can you think of other businesses that share your customer base? Could you work together to get new business by referring customers to each other?

We all know that word of mouth is a powerful method of advertising. So how can you make sure that your customers will tell their friends about you? Well, you can’t! But you can encourage referrals through referral incentives. For example, credit card companies sometimes offer a reward to customers who get their friends and family members to sign up.

You can boost your word-of-mouth buzz by focusing on the customer experience you offer. If your company excels in customer service, the number of customers you get by word of mouth will be higher than if your customer service is simply average or below average.

Give your customers superior experiences, and they will tell their friends. And don’t forget, the same is true if you give a customer a terrible experience!

The lead generation process

You might be thinking, “Sure, lead generation sounds all nice and sophisticated, but how do I actually do it?”

Well, that is a great question, and here is your answer. We’ve broken lead generation into a seven-step system that you can follow to create effective advertising campaigns, no matter what your industry.

  1. Define your target audience. Are you aiming for young people? Retirees? Homeowners? Farmers? Men? Women? You are wasting your marketing dollars if you do not have a specific audience you are trying to reach.
  2. Craft appealing messages. If you know who your audience is, and you know their pain points, you can write messages that appeal directly to what they are experiencing in their situation. Show that you understand them, and that you can help. And don’t forget to use pictures!
  3. Choose your channels. Choose media outlets and publications where your target audience will be most likely to see your messages. This includes both online and offline channels.
  4. Track sources of incoming leads. As you wait in anticipation for leads to trickle in, prepare a system and train your people to record the source of the leads. On the phone with a new customer? Ask them where they heard about you. Make sure your website administrator shares information with you about the sources of incoming traffic.
  5. Measure conversion rates. A “conversion” is a sale. So the conversion rate is the percentage of leads that end up as paying customers. To find the conversion rate for a specific campaign, divide the number of people who bought by the number of leads generated.
  6. Calculate your ROI. To calculate ROI, you need to know how much money you made from a particular ad or ad campaign. Then subtract the amount of money you paid to create and run the ad.
  7. Evaluate your results. Which ads were effective? What channels do you need to shift resources toward–or away from? As you start the cycle again, make necessary changes based on what you learned as you evaluated your results.

This process helps you crank up your lead generation machine and keeps it fueled up.

Components of a Strong Ad

Have you ever sat down at your desk and scratched your head as you tried to think what to put in your next ad that was due . . . yesterday? You may have wondered, “How should I start?”

There is a simple four-letter acronym that you can apply to advertisements. The four letters are AIDA, and here is what they stand for: Attention, Interest, Desire, and Action.

These four words are a simple template that you can use the next time that ad deadline creeps up on you. The words are a progression that you want to guide the reader through—a path from their first glimpse of your ad to the moment they have absorbed its message and are ready to take action.

  1. A bold headline–to get attention. Your headline is “the ad for the rest of the ad.” Its purpose is to draw the reader’s attention to the rest of the ad.
  2. Body copy–to create interest. Body copy is simply the text of your ad. Remember that less is more. Work to condense your text to the essence of what you need to communicate.
  3. A picture of success–to fuel desire. Including a picture—when possible—of the success or transformation that your product brings is an effective way to stir the reader’s desire for your product. Remember that they don’t desire the product as much as they desire the solution that your product will provide.
  4. A call to action–to tell them exactly what to do. End your advertisement with clear instructions for the reader. Do you want them to visit your store? To call for a sample packet? To visit your website? Give them your contact information.

Let’s talk a little more about your call to action. Not every call to action should be “Buy Now” or something similar. Someone who is unfamiliar with your company might not be ready to take that step. Instead, they want to learn more about you.

That doesn’t mean that you should eliminate a call to action. Rather, use a call to action that leads them one more step into a relationship with your company. This could be a conversation with a salesperson, a free sample or trial they can use at no risk, or a free informational resource.

These kinds of offers give the lead a path forward one small step at a time, rather than requiring them to gather the courage to make a gigantic leap forward (make a big risky purchase). As they proceed along the path, they will gain confidence in you and your product, which leads them toward a purchase.


You want to avoid the mistake of dumping money into advertising without (a) understanding what your goals are, and (b) having a plan or system for reaching those goals. Without new customers, every business will eventually die. As you learn to refine and improve your lead generation process, you can become increasingly confident that your business will continue to have customers to serve.

About the Author: Roy Herr is the senior marketing consultant at Rosewood Marketing. The Rosewood team guides business owners through marketing challenges into sustainable growth. Contact Roy at roy@rosewood.us.com