As service and technology firms begin to awaken from a long, recession-inspired hibernation period, they are again beginning to think about proactive lead generation. If your firm is stepping up outbound marketing, your first step should be to re-examine your firm's thinking about what works and what doesn't.

Consider the following seven service lead-generation misconceptions. Destroying these myths can lead to more production and better return-on-investment for your marketing time and dollars.

Myth No. 1: Cold-calling doesn't work

Time and again we encounter an aversion to cold-calling from service firm leaders and rainmakers. Most service firm gurus argue that cold-calling doesn't work—inconceivable, even, that you might give it a second thought.

Many professionals have tried cold-calling, and it hasn't worked for them. Another subset of professionals believes that cold-calling can work, but because they find it so distasteful they neither engage in it nor advocate it.

Service lead generation misconception no. 1 steers many service firms completely away from cold-calling. Yet, applied correctly, cold-calling can be an amazingly successful lead-generation tactic that can return excellent results, often very quickly.

True, there are many ways that you can try cold-calling and fail, but there are also—if you're willing to seek them out—cold-calling strategies that consistently yield above-average ROI.

Myth No. 2: Web sites don't affect lead generation

"We have a Web site up because we have to have a Web presence, but our Web site has no affect on whether we attract or win new clients."

Service lead generation misconception no. 2 was effectively debunked at a seminar I delivered a few months ago. There were about 40 people in the room, and I asked the audience, "When you're buying something for your business, do you, at some point in the buying process, visit the Web site of the vendor firm?" All the hands in the room went up. Then I asked, "Who is at least somewhat influenced by what they see on the site?" All hands stayed up.

My third question was, "Have you ever been referred to a service firm and, after visiting the Web site, decided not to contact them because of what you saw on their Web site?" About half the people raised their hands.

Web sites affected the perceptions of 100% of that group, and affected at least 50% of the attendees' decisions to become sales leads for another company. So let's put this misconception to bed right now. Also, a Web site can generate leads from search engines and registrations for events and seminars; it can also act as a communication channel between a firm and its prospects.

Bottom line: contrary to popular opinion, your Web site greatly affects your ability to succeed with service lead generation.

Myth No. 3: We need more brand recognition first

No, you don't. So you're about to spend $20K… $200K… or some other amount on "brand recognition" to prime the pump for the lead generation you'll do in the coming months.

Why not just start with directly generating the leads? For every well-known service brand there are dozens of service firms that most people have never heard of. Yet, they find clients and do well. Name recognition doesn't hurt, but for the most part building name recognition should be a byproduct of something else, such as lead-generation campaigns, PR and publishing; events and speaking; or word-of-mouth about your services.

In the end, regardless of your brand recognition, what you need to do to fill the front end of your sales pipeline is to develop a compelling value proposition and then find qualified prospects. If brand recognition is the goal in and of itself, you'll end up spending a lot of money with little return.

Myth No. 4: We need more new leads

According to a report by the Aberdeen Group, over 80% of generated leads are never followed up on or are dropped or mishandled. Service firms are particularly adept at neglecting the leads and business opportunities that they already have in-house, just waiting to be called.

And the negative results are staggering. BtoB magazine reported in April 2003, "An 11% reduction in dropped/lost leads, combined with a 1% improvement in lead-to-order conversion rate, increased annual gross profit by 136%." Seems far-fetched, but I've run the numbers... they're right.

Many service firms think they need more leads when in fact they could see improved results just by better handling and nurturing the leads they already have.

Myth No. 5: Let's run some ads

Service firm leaders—those that hold the purse strings for the marketing budget—are subjected to thousands of ads a day, just like every other person. These ads do a great job, too, as they influence many service businesses to equate service lead generation and marketing with advertising.

Service firms run ads in business journals, trade magazines and trade shows with eager anticipation. They're proud of the ad's creative design, copy and message. More often than not, however, they're disappointed with the ROI from advertising.

Ads are a waste of money for most service firms. As a service lead-generation vehicle, advertising should be on the bottom of your list.

Myth No. 6: Direct mail doesn't work for services

Earlier in this article I noted that 40 out of 40 breakfast seminar attendees indicated that they visited Web sites before purchasing new products and services. I also asked how many of them were attending the seminar because of the direct mail invitation we sent to them. A number of them raised their hand. (To be exact, 53% had heard about the event through direct mail.)

Another 30% had registered for the event through our Web site (see service lead-generation misconception no. 2), and a whopping 80% had never heard of our firm before attending the event (see service lead-generation misconception no. 3.)

There are a thousand ways to fail with direct mail. Yet, much like cold-calling, direct mail can be a major vehicle for service lead-generation success.

Myth No. 7: Don't market to current clients

"We have about 5,000 target companies for this service. About 1,000 are already our clients, so we should focus our lead-generation campaign on the other 4,000."

Sure, you want to bring the other 4,000 companies into your fold and make them your clients. Good idea. But if you're looking to generate maximum response from your lead-generation campaigns, and maximum revenue from your investment, don't ignore your current clients.

Don't worry about upsetting those current clients by interrupting their time with your marketing message.

First, current or former customers, assuming they're relatively satisfied with your services, are an order-of-magnitude more likely to respond favorably to your lead-generation campaigns than non-customer companies.

Second, your competitors want to get to your customers (and they're trying), and other companies are also vying for their attention. If your clients are not focusing on your messages and value, they're focusing on someone else's.

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If you want to have above-average success with lead generation, you first have to squelch the myths and misconceptions that will keep you from moving in the right direction. By doing so, you can take advantage of (dare I say) inconceivable tactics that everyone else mistakenly writes of—and you will be all alone, out front, generating the leads your competition is missing.

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image of Mike Schultz

Mike Schultz is president of RAIN Group, a global sales training and performance improvement company, and director of the RAIN Group Center for Sales Research. He is the bestselling author of Rainmaking Conversations and Insight Selling. He also writes for the RAIN Selling Blog.

LinkedIn: Mike Schultz

Twitter: @mike_schultz