Diminishing returns from lead generation are every promotional coordinator’s public enemy number one. The problem is, all promotional campaigns — no matter what their objective — suffer from diminishing returns. What this means is that the cost per unit of benefit increases exponentially with each repetition of the campaign. If the purpose of the advertisement is to generate sales opportunities, this means that the cost/opportunity increases with each repetition. Now here’s the big difference between opportunity-generation campaigns and relationship-acquisition campaigns. Because the former are targeting just a tiny sub-set of the market (prospects who are ready to buy), their returns diminish at a more rapid rate than the latter (which are targeting the entire market). For this reason, relationship-acquisition lead generating campaigns generate greater numbers of responses AND their returns diminish at a much lower rate. The downside is that these campaigns do not provide you with sales opportunities: they provide you with relationships, that have to be managed until they become opportunities. Now, here’s the really good news. If your relationship-management activities (events and a periodical) cost you nothing on a (per-relationship-managed basis), for the same promotional expenditure, relationship-acquisition campaigns will generate (over time) significantly more sales opportunities. Of course, if you distribute your periodical by e-mail, and if you charge enough for your events to cover the variable costs (including promotion) then your relationship-management activities will cost you nothing. The result is a significant increase in the productivity of your sales process.
