What is the Most Effective Way to Generate More Leads for a Small Business?

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Answered by: Dolly, An Expert in the Lead Generation Category
A winning lead generation strategy should provide the highest return on your investment. Most lead generation tactics require an investment of time, money or both so it's important to track how many leads are being generated and also how many of those leads are converting into sales. One very effective way to generate more leads for a small business is through referral marketing.

Referral marketing is using your network of business contacts and personal contacts to generate more leads for your business. It can be extremely effective and if done correctly referral marketing can bring high-quality warm leads to your door. A lead based on a referral carries extra value because when someone refers your business it's like a vote of confidence and trust. The best kind of referral is really a glowing recommendation for your business!

How can you create your own referral network to generate leads for your business? Make a list of the people and businesses that you have contact with on a regular basis. Rate each person or business on the list based on how likely they are to come in contact with potential clients for your business. Contact people on your list and ask them to recommend you. You may want to visit especially valuable referral sources in person to give them flyers or other printed marketing material.

There are three kinds of common referral agreements you can consider. First, there are one way unpaid referrals, these are people that will recommend your business and not expect to receive anything in return. Your friends and family are probably in this category. Next, there are mutual referral agreements. These are like partnerships with other businesses where both parties agree to send leads to each other. A good example would be the carpet cleaner who partners with a maid service because they are likely to get inquiries for the other company's service on a regular basis and therefore partnering for leads is mutually beneficial.

The last type of referral agreement is a pay-per-lead agreement. Just like it sounds, you will pay for each lead. The payment is usually money but it can also come as a discount on your services or free labor. This kind of referral agreement is a good way to get your current customers to refer you. You can offer them a discount or coupon for every new client they refer. When you are paying for leads it is extremely important to track lead conversion to make sure that you are getting a good return on your investment.

Referral marketing is a very powerful lead generation strategy because it extends your advertising reach to consumers that you might not otherwise have contact with. When you set a strong referral network into place it may even grow exponentially on it's own, bringing more and more leads to your business. Your referral network requires care and maintenance to stay strong. Cultivate new relationships with likely lead sources and stay in touch with all of your referrers because referral marketing is all about good business relationships and profitable networking!

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