Marketing terms can be confusing.
Everyone is talking about “conversions”…
But is that the same thing as “lead generation”?
Today we are going to discuss:
- What is conversion?
- What is lead generation?
- Conversion vs. lead generation.
Want to get some clarity once and for all?
What Is Conversion?
Conversion is the act of getting someone to take the action that you want them to take (desired action).
Typically, it means getting them to take the next step in your sales funnel, whatever that next step may be.
Most Popular Conversion Types
Here are the most popular conversion types:
- Potential customer -> Site visitor. You grab the attention of a potential customer and get them to click through to your website (e.g. get them to click on a Facebook ad).
- Site visitor -> Lead. You persuade a site visitor to give you their contact details (e.g. get them to download your lead magnet).
- Lead -> Paying customer. You pitch your product to a lead and persuade them to buy it.
- Paying customer -> Repeat customer. You pitch a product to an existing customer and persuade them to buy it.
When someone is talking about conversions, they are usually referring to one of these four conversion types.
What Is a Conversion Rate?
A conversion rate is a metric that shows what percentage of people that you presented with a call to action took that action (converted).
Here are some examples:
- If you have shown your ad to 100 people and 10 of them clicked on it, the conversion rate of that ad is 10%.
- If 100 people have visited your website and 10 of them subscribed to your email list, then the conversion rate of your website is 10%.
- If 100 people have visited your sales page and 10 of them bought your product, your sales page conversion rate is 10%.
Note that we used a 10% conversion rate for all three examples for the sake of simplicity. Conversion rates can vary wildly.
What Is Conversion Rate Optimization?
Conversion rate optimization is the practice of optimizing web pages for conversion. It’s a way to increase conversion rates.
Typically it is done via A/B testing (also known as split testing):
- You create two variants of the same page: variant A and variant B. There should be only one difference between them. That’s the element that you are testing.
- You split the traffic into two and send half of it to variant A and half of it to variant B.
- You compare the conversion rates between the two pages and keep the winning variant.
Conversion rate optimization is extremely important because it allows you to make more sales without increasing your marketing spend.
Conversion Rate Optimization Best Practices
Online marketers have been using A/B testing to optimize web pages for 20+ years now, so at this point, we know what works and what doesn’t.
Here are some of the conversion rate optimization best practices that you should follow if you want to increase your conversions:
- One conversion goal per page. You need to make sure that each web page presents the potential customer with only one action that you want them to take.
Don’t ask them to follow you on social media and subscribe to your email list and fill out a survey and buy your products and leave a review. This will just confuse people.
And as the saying goes, “A confused mind always says no”.
- Clear call to action. You might think that the potential customer knows what you want them to do next, but that’s an assumption that you can’t afford. You need to present them with a clear call to action. Want them to click on your ad? Subscribe to your email list? Buy your product? Ask them to do it.
- No distractions. You should remove all page elements that might distract the potential customer from taking the desired action. Remember: one goal per page. That’s it. Everything that gets in the way of achieving that goal needs to go.
In fact, when people ask our co-founder Russel Brunson to give them feedback on their landing pages, most of the time their landing pages turn out to be way too complicated and Russel ends up deleting 90% of the stuff on them. All those bells and whistles might look cool, but they are probably hurting your conversion rate!
What Is a Lead?
A lead is a potential customer who:
- Has expressed an interest in your product or service.
- Has given you their contact details (typically their email address).
Alternatively, it can be someone who has not given you their contact details but has expressed an interest in your product when you reached out to them directly (this definition applies to sales prospecting)
What Is Lead Generation?
Lead generation is the process of converting potential customers into leads by persuading them to give you their email addresses.
This is typically done via a lead generation funnel known as the reverse squeeze page funnel:
- You create a lead magnet.
- You create a landing page for that lead magnet.
- You drive traffic to that landing page.
What You Need To Do To Generate Leads
Lead generation can be broken down into two key tasks:
- Generating traffic. This can include search engine optimization, social media marketing, influencer marketing, paid advertising, and so on.
- Converting that traffic. This includes creating a lead magnet, creating a landing page for it, conversion rate optimization, and so on.
It’s important to get both of these right.
If you can’t generate traffic, there won’t be anyone to convert.
Meanwhile, if you can generate traffic but can’t convert those visitors into leads, you will end up burning through your marketing budget without having anything to show for it.
Lead Quantity vs. Lead Quality
When it comes to lead generation, it’s important to understand that you need to balance:
- Lead quantity.
- Lead quality.
When you focus too much on one of these, it negatively impacts the overall conversion rate of your sales funnel.
Always remember that the purpose of lead generation isn’t to collect a bunch of random email addresses.
The purpose is to obtain the contact information of your dream customers.
Lead Generation Best Practices
So how can you generate qualified leads that actually convert?
Here are some of the best practices that you should implement:
Create a Super Valuable Lead Magnet
Your lead magnet is the foundation of your lead generation strategy. In fact, it’s the foundation of your entire sales funnel.
You need to understand that people are not going to give you their email addresses unless you offer them something super valuable in return.
So give your lead magnet the attention it deserves. You want to create something so valuable that your dream customers would happily pay for it should you ever choose to sell it.
And keep in mind that people will use your lead magnet to decide whether or not they should invest in your premium products.
Impress them and they will be more open to your paid offers. Disappoint them and you won’t get a second chance.
Create a Landing Page for That Lead Magnet
Your lead magnet might be free, but you still need to sell it, meaning, you still need to persuade potential customers to get it.
And that’s what the lead magnet landing page is for. Think about it as the sales page for your freebie. Make it clear to the potential customer how your lead magnet will make their lives better.
Also, landing pages have the highest conversion rates of all web pages, so it makes sense to create one for your lead magnet.
“10 Tips For Killer Lead Generation Landing Pages”(ClickFunnels)
Promote Your Lead Magnet Everywhere You Can
You need to treat your lead magnet like a paid product not only in terms of creation but also in terms of promotion.
Promote it on your website, on your social media, on your Youtube channel, collaborate with influencers, use paid advertising to get it in front of your potential customers, etc.
Remember, “Build it and they will come” is a lie when it comes to paid products, it’s also a lie when it comes to lead magnets.
So once you have created a super valuable lead magnet, get out there and promote it relentlessly.
Optimize Your Website for Lead Generation
We’ll be honest with you:
We believe that websites are dead. Sales funnels are the future.
Typically, when a visitor arrives on a website, it’s unclear to them what they should do next.
They see a bunch of links in the navigation bar, so they start aimlessly clicking around. They read a bit of this page, a bit of that page… And then leave without giving you their email address.
This approach has a disastrous effect on the site visitor -> email subscriber conversion rate.
That’s why the #1 way to optimize your website for lead generation is to use your lead magnet landing page as your homepage. Don’t confuse your visitors by giving them a bunch of options. Give them just one: getting your lead magnet.
And we practice what we preach. Our homepage is a landing page that is designed to get the visitor to sign up for our free 14-day trial. To be honest with you, we are baffled as to why more SaaS companies aren’t using this approach. Oh well.
That being said, we understand that this might feel drastic, which is why we also wrote a comprehensive guide to optimize a traditional website for lead generation:
Pay Attention to Traffic Quality
Remember the previously discussed “lead quantity vs. lead quality” dilemma?
It’s can be easy to develop lead generation myopia without even realizing it:
You want to get more leads, so you start optimizing for lead quantity… But then the next thing you know your lead -> paying customer conversion rate drops off a cliff!
That’s why when you are driving traffic to your lead magnet landing page, you want to always be asking yourself “Are these people, my dream customers?”.
Resist the temptation to choose quantity over quality. Remember, the number of leads is ultimately a vanity metric, what truly matters is profit.
Conversion vs. Lead Generation
- Conversion is the act of getting someone to take the action that you want them to take (e.g. click on your ad, subscribe to your email list, buy your product, etc.).
- Lead generation is the process of converting potential customers into leads by persuading them to give you their email addresses.
So the term “conversion” is an umbrella term that covers all instances of getting someone to take the action that you want them to take in the business context.
Meanwhile, the term “lead generation” falls under the “conversion” umbrella, since it refers to a specific type of conversion.
So You’ve Got a New Lead. Now What?
Converting site visitors into leads is just the beginning.
You need to then convert them into paying customers and into repeat customers. So how can you do that?
Our co-founder, Russel Brunson, has created a system for that. It’s called the Value Ladder sales funnel. Want to learn more about it?
Our 5 Day Challenge will show you exactly how to implement it in your business.
You will learn how to:
- Generate unlimited leads.
- Create your first lead magnet.
- Build your first sales funnel.
- Create a simple 6-email follow-up sequence.
- And launch your funnel!
…in just five days.
So don’t hesitate.