You Don't Want Leads

I recently got connected to several prospects who were looking for support from an agency on a lead generation campaign. It won't be the last time that a business wants leads, leads, and more leads. It will also not be the last time that I reply with: "You don't want leads. You want relationships."

If you're in a constant pursuit to attract prospects, convert them to customers, and you have an intense fixation on the Cost of Customer Acquisition (CAC), you will miss out on potential opportunities to create those long-term relationships which would bear fruit in the future.

Let's reframe this. Instead of looking at each customer as a one-off transaction that ends with a CAC value, consider how you can consistently nurture your relationship with these customers. The revenue generated would, thus, be a byproduct rather than the end goal.

The Customer Lifetime Value is a qualitative metric which you can use as your checkpoint - this indicates the estimated total revenue you can reasonably expect from one customer and compares that number to the presumed customer lifespan.

By measuring it against the CAC, you can ascertain the duration it will take to recover the financial investment required to acquire a new customer.

For example, a beverage company could see its marketing spend attract one consumer to purchase one bottle. However, they project consumer's habits and estimates them to buy one bottle a week for the rest of their lives. This mindset would drum up a greater sense of confidence when it comes to planning for their marketing efforts.

When we cultivate relationships with our customers, we establish a two-way street that both of us gives, as well as receives. If the intent of this relationship is purely transactional, then it won't last.

Brands and businesses must see the need to be customer-obsessed and weave that into their company's DNA. Being number one in the world isn't just by building the best team, and providing the best product; it is to have the best relationships with your team and your customers.

You don't want leads. You want relationships.