Killer Lead Magnet
In business one of the most overlooked tools is the lead magnet.
A good friend of mine sent me this picture this morning and I wanted to make an article on it as it always make me laugh and is such a good business lesson.
As business leaders, you want to attract as many leads (i.e., people you can sell to) as possible as quickly as possible and for as little money as possible. When you distill business down to its most important component, it's this. Yes, you want to sell something people want. Yes, you want to treat your employees well, but if you don’t have someone to sell to, then none of that matters. It's really tough to have a failing business when you have more leads than you know what to do with even if your business is not very good.
Most businesses use the traditional tracks to get leads such as cold calling, SEO, inbound marketing, trade shows etc. but I find that the one that has the highest ROI is the lead magnet and it’s the one that’s most overlooked. The lead magnet is not squishy balls and pens and garbage with your logo that you hand out at conferences - I find most of this to be a complete waste of money. The lead magnet is something so desired by your target customers that it quite literally pulls leads to you and most importantly it's something that is free. People that want your services literally come running up to you and tell you who they are. I'll tell you a story about a lead magnet:
Early in the days of starting my company Visikol , we tried everything to figure out where our technology of making tissues transparent could add value and we even started a Kickstarter where we sold clarified animals as art.
Once we figured out that we added a tremendous amount of value in the pharma space helping pharma companies understand if their therapeutics were safe and efficacious, my Co-Founder Tom was adamant that we kept giving away the animals as art as people loved them. I thought it was the stupidest idea ever and I hated making the things with Tom on my Friday nights and then shipping glass vials all over the country and giving out at trade shows and conferences. I thought it made us look strange and not legit - who gives out cleared mice!!!?
But we kept doing it and something strange started to happen. Every conference or trade show we went to, hundreds of people would come by our booth to grab a mouse - hundreds of researchers who could be our customers. This went on for about two years and we amassed thousands of emails, thousands of followers on social media, and many of these folks turned into customers.
And yet I still thought it was a terrible idea until Tom and I went to go meet with our Program Director at the National Science Foundation (NSF) - the woman responsible for giving us millions of dollars in grant funding. We walked into her office and right away Tom and I's eyes went right to the glass jar on her desk with a cleared mouse in it. Tom looked at me and winked and I knew instantly I was dead wrong: those mice were a great idea!
The lesson is that lead magnets are critical to your businesses success and are an extremely powerful tool even if it's tough to measure. Here are a couple keys in building a killer lead magnet:
- It needs to be free
- Adds real value and is not just a ChatGPT written ebook
- Its so enticing it pulls people to you
- People are willing to exchange their emails and follow you in exchange for receiving it
And lastly, the math needs to be make sense. Simply, the customer acquisition cost (CAC) needs to be lower than the lifetime customer value (LTV) and ideally less than 1/3rd. For us, the cost of the mice was $3 per mouse and the lifetime value of a customer was >$20,000 where just converting 1 out of 1,000 leads checks out.
The reason lead magnets work so well is that if you give something to someone for free, they feel compelled to work with you and especially if the lead magnet is great. My only regret is not sending out more mice!
