Thinking Like A Long Term Investor

What does it take for a new lead to turn into a customer?

Well for one, time is a major factor.

People are ready when they are ready.

A lot of stress happens when we try and get our leads to be “ready” when they’re just simply not ready yet.

For whatever the reason.

More often than not, people will say that the leads they are generating are “no good” because they are not moving forward and buying right away.

And you know what?

That’s completely normal.

Truthfully, only a small percentage of your leads will be ready to buy today, or this week. 

The good news is that for a lot of companies, that “small percentage” is enough to get a return on their advertising investment within a reasonable period of time. 

That being said, the majority of leads are going to take time.

Another percentage might purchase within a 90 day time horizon. 

Others might take up to 18 months or longer.

Of course, some will never buy.

And some may take literal years to turn from being a “lead” to finally deciding to turn into a customer.

And if you’ve been in business for a while, you’ve probably seen that play out more than once.

A customer saying, “you know what. I’ve been following you guys for years. And decided I was finally ready to make a purchase”

Not uncommon, right?

So the first thing to remember is that leads (human beings) take time to finally decide to make a purchase.

And we need to look at our “lead flow” from that perspective.

Looking at it as a long term investment.

Understanding that the leads we generate today may not be ready for a couple weeks, a couple months or even a couple of years.

Instead of immediately going to “these leads are bad” because they’re not all buying like you thought they would, it would be better to think…

“This is an investment and I know one of the biggest factors at play is simply time.”

Also, I would encourage you to not get stressed and start doing things to try and “force” something to happen.

Like “bending the truth” and creating scarcity where it doesn’t actually exist, or creating deadlines that aren’t actually real, or things that just make you feel like…

“Ahh. Is this really okay to do? I’ve seen other marketing people do it, but I just don’t feel great about it, but still…I just want these leads to do something”

By the way, I’m totally guilty of having done that.

Getting stressed wondering why people are not buying. 

Creating deadlines that were arbitrary, etc

So I don’t blame you if you have too.

This is all a learning experience. 

And truthfully, many of us have been on the receiving end of those types of “tactics”.

And for the most part, instead of “speeding us up” to make a purchase, for a lot of us, it completely turned us off.

Made us lose trust.

Made us decide that we were never going to buy (in some cases). 

Now that’s not to say that having real authentic deadlines, limited availability, limited quantities, etc are bad.

In fact, If they are true, it absolutely may help, and might just be the right thing to talk about.

I mean, if you have limited product availability, let your leads know about it.

If you have a real deadline in place, make it known.

That’s all good.

But what I’m saying is, we need to be patient and understand that lead conversion takes time.

And we have to respect and work within the reality of a normal “sales cycle” time line. 

The more we try and “force something to happen” typically the more it back fires.

In many ways, we are in the business of building trust.

And that trust can be lost pretty quickly.

So we need to be patient.

And we need to think long term.

And we need to think more like investors when it comes to our advertising spend. 

By the way, I’m preaching to myself here on a lot of this.

It’s one of those things you find yourself needing to be reminded of over and over again. 

Thinking like an investor, and not a lottery ticket buyer.

Investing in lead flow, and being patient with getting a return on your capital.

Managing and looking at your data.

Understanding how long it takes (on average) for your business/service/product/offer to turn new leads into customers.

So what does that mean practically?

It means that when your generating leads, you NEED to have long term follow up systems in place.

I think email is one of the best ways to do that, but there are other methods.

By the way, when you have the ability to track and measure your lead generation efforts, you should be able to get to the point of understanding how long it takes (on average) for a lead to turn into a customer.

For some businesses, it could take a week.

For other businesses, it could take 24 months. 

Everyone has a different sales cycle.

Depends on the product.

Depends on the price.

Depends if you are selling to another business, or “direct to consumer”.

For a photography business my wife and I ran, it took around 68 days on average for us to turn a lead into a customer.

Some of that was the fact that most people we worked with didn’t like being in front of a camera, and truthfully who does?!

I know being a massive introvert myself being on camera is not what I would consider a great time lol

So our email follow up sequences included a lot of testimonial videos from our other customers who thought the same thing.

We would send emails close to daily in our marketing system, but your business may be different. 

Maybe you communicate every few days, or once a week.

But either way, having some type of follow up/nurture system is key.

But for us, it was 68 days (on average) from brand new lead to new customer.

There were probably a long list of other reasons (outside of being nervous of being in front of a camera) it took 68 days (on average) but either way, we knew that’s how long it would take.

And so we built out our back end follow up system accordingly. 

It went beyond the 68 day mark, in case you’re wondering. 

We just knew how important follow up was, so writing emails every week was one of the most important things we could do.

We knew that the investment we made today in acquiring leads was going to pay off in 68 days from today.

So we understood that we had to “float” that capital investment in advertising accordingly.

Again, other businesses may see a return on capital invested in advertising sooner than that.

And others may take longer than that.

But the “game” is understanding that leads take time to convert.

And the “game” is figuring out what that looks like for your business, and having systems in place to communicate with those leads until they decide they are ready.

And lastly, the “game” is being able to be mentally okay with investing capital into advertising and being patient with knowing that it’s going to take time to see that turn into an “ROI”.

Again, depending on your business, you may see that return in 14 days, 30 days, or 30 months.

But either way, assuming the market is interested in your offer, and assuming you have a system in place for long term follow up and communication, you’ll see that investment come back to you. 

Time is just one of the biggest factors.

In the next blog, I’m going to talk about the next “factor” involved in helping turn your leads into customers.

And that revolves around the concept of giving them a “reason why” (going back to the concept of “what’s in it for them”)

And I’ll give you an illustration behind that concept with a story of two men trying to sell a horse. (Claude Hopkins wrote about it)

Until then!

-Colin