When it comes to lead generation, there are two main types of leads: price-focused leads and value-focused leads. Price-focused leads are those who are primarily interested in the price of your product or service, while value-focused leads are more interested in the benefits that your product or service can offer them.
So, which type of lead is better?
It depends on how you answer this question: How much more valuable is your offer compared to the competition?
If you have a unique product or service that is not easily replicated by your competitors, then you can focus on generating value-focused leads. These leads will be more likely to convert into customers, even if your price is higher than your competitors.
However, if your product or service is more commoditized and there is a lot of competition, then you may need to focus on generating price-focused leads. These leads may be more difficult to convert into customers, but they will be more likely to convert if your price is lower than your competitors.
Here’s a simple rule of thumb: the less differentiation your offer has and the more competition, the more you should focus on price to convert the lead in a customer.
Here are some examples:
- Unique product or service: If you have a patented product or service that is not easily replicated by your competitors, then you can focus on generating value-focused leads. For example, if you are a software company that sells a unique CRM system, then you should focus on generating leads who are interested in the benefits of your CRM system, such as increased sales and improved customer retention.
- Commoditized product or service: If you sell a product or service that is more commoditized and there is a lot of competition, then you may need to focus on generating price-focused leads. For example, if you are doing business in highly commoditized markets, such as utilities or basic office supplies, then you should focus on generating leads who are looking for the lowest price on those services.
Of course, there are always exceptions to the rule. For example, if you are a new company and you don’t have a lot of brand recognition, then you may need to focus on price-focused leads, even if your product or service is unique.
How can you find out if your offer is highly commoditized? Subscribe to my newsletter as I will write about this and publish a short video detailing this.