How to generate leads using the Lighthouse Client strategy (Updated 2023)By Dennis Yu
Over the years, one of the most requested topics that agency owners seek my opinion on is how to generate leads and grow their business. Whenever they ask me that question there’s always one thing I tell them. I tell them that of all the issues that agencies have, lead generation is one of the easiest issues to solve. (The hardest challenge, by the way, is retaining clients as your business scales, and keeping operations tight.)
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When it comes to lead generation, here is the strategy I recommend to all agency owners, regardless if you’ve got an established business or are just starting out on your own.
It’s called the Lighthouse Client strategy.
Table of Contents
- What is a Lighthouse Client strategy?
- Understanding the X-Y-Z framework as a small business marketing agency
- How to generate leads with the Lighthouse Client strategy
- Common struggles with agency clients
- I have my B2B lead generation strategy! What’s next for my lighthouse?
- Start remarketing to generate leads
What is a Lighthouse Client strategy?
A Lighthouse Client strategy refers to a B2B lead generation strategy and marketing approach where a special kind of agency client, known as the Lighthouse Client, consistently yields positive results. This is due to the seamless compatibility between the client’s needs and the small business marketing agency’s expertise.
So, who are these Lighthouse Clients, and what defines them?
A Lighthouse Client is an agency client for whom marketing agencies can always deliver results because they:
- Are easy to work for
- Provide the most revenue, and
- Fall in sync with the small business marketing agency’s expertise
The Lighthouse Client strategy is all about how companies can hone in on a particular niche that they aim to serve. Your niche could be anything ranging from restaurants to dentists to real estate agents.
In the initial stages of their business, new small business marketing agencies often adopt a broad lead generation strategy, accepting any potential leads as agency clients without defining their niche. This practice stems from the perspective that every business needs to start somewhere, leading fledgling agencies to engage with just about any client who shows interest in their services. This B2B lead generation strategy isn’t exclusive to start-ups and is also practiced by agencies that aren’t yet seven-figure businesses.
It’s not hard to understand why small business marketing agencies take this approach. When you’re starting out, figuring out how to generate leads can feel like a major challenge, and owners are eager to start generating a positive cash flow.
But there’s a problem. Agreeing to everything and catering to all industries might seem like a sound way to generate leads in the short term, but it could potentially harm your business over the long haul. This indiscriminate lead generation strategy can dilute your brand authority and expertise in any particular sector, ultimately putting you at a disadvantage.
To effectively avoid this problem, one practical method small business marketing agencies can employ is the X-Y-Z exercise, designed to help them narrow down their niche. This exercise requires marketers to complete a simple statement:
"I help X achieve Y through Z."
This can help businesses get clarity on their agency’s vision and focus, ensuring their long-term success. Figuring out how to generate leads that will support the agency’s growth over time is much easier after completing this exercise.
Let’s dig a little deeper into the X-Y-Z framework.
Understanding the X-Y-Z framework as a small business marketing agency
The value of fully embracing and specializing in a particular niche cannot be overstated for small business marketing agencies. Agencies that make this strategic choice are perceived by prospects to possess a higher level of authority in their specialized niche compared to those that spread their services thin across numerous sectors. When it comes to how to generate leads, this change in the agency’s public perception and reputation will help eliminate a lot of noise—and sub-par clients.
Consider the two statements below as an example. Which of these do you think would create a more compelling impact on a prospective client?
Statement 1: My primary focus is on the restaurant business. I have extensive experience in marketing for restaurants and can provide numerous references from satisfied restaurant owners. I understand the unique challenges and opportunities faced by restaurant owners and have developed strategies to help restaurants succeed.
Statement 2: I offer services to a wide range of businesses, including restaurants, chiropractors, real estate agents, eCommerce startups, and more. No matter what your business is, I am happy to take you on as an agency client.
It is clear that the first statement positions the agency as a domain expert, demonstrating an in-depth understanding of the restaurant business. It gives the impression of an agency that can provide assured value thanks to its specific industry knowledge, rather than being a "jack of all trades and master of none."
If you were a restaurateur, which agency would you trust to handle marketing for your business?
The use of the X-Y-Z framework serves as a powerful tool for agencies to precisely define their niche, and in turn, master how to generate leads that will be targeted and profitable.
This framework guides the agencies to:
- Identify their target audience, ensuring they are able to speak directly to their unique needs.
- Establish what they want their clients to achieve, setting clear goals and expectations that align with the client’s business objectives.
- Choose the best strategies to implement, helping them develop a tailored, targeted approach that increases the likelihood of success.
How to generate leads with the Lighthouse Client strategy
Finding a Lighthouse Client is like finding the “why” of your existence. Finding the why gives small business marketing agencies a purpose. And if you want to learn how to generate leads, having a well-defined purpose puts the rest of the process on easy mode.
It is clear that the effort required by an agency to service five completely different and unrelated businesses would be significantly greater than the effort required to cater to, say, 50 doctors. The 50 doctors all share an analogous business model. The small business marketing agency with an effective system in place that gets results for one doctor’s practice will more easily be able to put the same client strategy to work for more similar agency clients at scale.
This phenomenon can be attributed to the power of specialization and the perception of expertise. Regardless of whether agencies genuinely possess superior skills in delivering a service, the perceived authority can meaningfully influence client decisions.
This perceived expertise not only adds to their credibility but also enables the specialized agency to demand a higher price for their services. It’s not just about learning how to generate leads; it’s just as important that your lead generation strategy gets you the best possible clients.
A parallel can be drawn to the healthcare sector: a patient usually pays more to a specialist doctor than a general practitioner thanks to the specialist’s expertise in a specific medical condition. Sure, in some cases, the family doctor may have been just as effective, but the specialization gives clients more confidence. That feeling of trust and confidence is what this B2B lead generation strategy taps into.
So, how does one find their Lighthouse Client and solve the lead generation issue? Here’s how.
Step 1: Creating your document
List all your clients in Google Sheets or Excel. This will offer a consolidated view of all your current agency clients.
Step 2: Rating your clients
Create three columns next to your clients so that you can rate each of them on a scale of one to five with five being the best. The categories for rating are Ease, Fitability, and Differentiation.
The Ease column determines how easy it is for you as an agency to get work done for your clients. If you think that the work is really easy, then put down five. The higher the number, the better it is for you. Lower the number, the more difficult it is for you to service the clients. The more of these level-5 clients you have, the easier account management will be.
The Fitability column helps agencies determine how much money they can generate from a client on an average deal size. While some clients might only be worth $100 a month, others could be worth $1,000 a month. Again, the larger that number is, the better it is for you.
And finally, the third column, Differentiation, states how much perceived differentiation you as an agency have with that client. A perceived competitive advantage is one where you credibly are better. This isn’t whether or not you actually are good at a service, but whether your client will believe you if you say that you’re the best at that service.
For example, I’ve spent over a billion dollars on Facebook and Google Ads in the last 15 years. And even though I’ve spent more money on Google than Facebook, I have more perceived authority when it comes to Facebook and social media since that’s what I’ve been talking about more in news outlets and on conference stages.
Step 3: Analyzing results to identify your Lighthouse Clients
Look at the results and decipher which client among all of your clients is your lighthouse client.
The maximum score you could have for the ideal agency client would be 15 points because you have five points, five points, and five points. Add that up, and then see what kind of pattern you have.
This method is an objective way of determining how agencies should pick their lighthouse client. Think of it as a recipe to help choose what content to start focusing on and who to direct that content towards.
For example, let’s say you determine that your Lighthouse Client is a restaurant owner. As an agency wanting to learn how to generate leads, you can show new restaurant prospects what you’ve done for similar clients in the past. The leads can see that you have a high level of authority in their field through the examples and content you’re sharing.
The result? You now know how to generate leads based on what has already worked in the past. There’s no need to overcomplicate things and reinvent the wheel with each new client. Instead, you can capitalize on your expertise with existing small business marketing agency clients to implement a B2B lead generation strategy that delivers results.
Common struggles with agency clients
When agencies first learn how to generate leads using the Lighthouse Client strategy, the challenge isn’t really the first step of identifying the Lighthouse Client. Instead, small business marketing agencies are more likely to struggle with the fear of limiting their options too dramatically by using this B2B lead generation strategy. The worry is that by zeroing in on a narrower pool of clients, they’ll limit their earning potential and lose out on profitable prospects.
I’ve done this for a few hundred agencies and it goes without saying that most folks struggle. However, the paradox is that the more agencies attempt to expand their services by claiming to do everything, the less business they generate. This happens because they transform into a yes-agency, accepting any demand or request from clients.
This puts small business marketing agencies in a bind in which they feel compelled to acquiesce to all potential demands to secure the deal. But, such a practice is counterintuitive.
Common scenarios look a little something like this:
"Can you build my website?" Yes.
"Can you manage my social media?" Yes.
"Can you mow my lawn?" Yes. Wait, what? No.
It’s much better, more profitable, and more effective to establish your authority with one client in a specific field, and to later secure 10 or 100 more similar clients. Now, this doesn’t imply that you need to sever ties with clients not aligned with your Lighthouse Client’s category. You can keep these business relationships if they are serving your agency. Our focus here is on how to generate leads looking forward.
As you discover your point of differentiation and attract more clients from your chosen niche, your goal should be to achieve the highest level of specificity possible.
Consider the case of a restaurant owner as your Lighthouse Client. Once you’ve marked restaurants as your focus, dive further to identify the type of restaurant you’ve had the most success with. This could range from coffee shops to restaurant chains, bed and breakfast establishments, or upscale luxury eateries.
When agencies successfully become more specific in their service provision and tailor their B2B lead generation strategy to match this specialization, they naturally tackle the challenge of lead generation. You’ll quickly learn that having a repeatable, niche-specific client strategy will help you land more agency clients with less effort thanks to your proven track record in the niche.
I have my B2B lead generation strategy! What’s next for my lighthouse?
Once agencies have determined their lighthouse, the next step is to align what they’re doing for that business, which is WHY, HOW, and WHAT, with their own personal goals.
This is where a video marketing strategy comes into play. When you’re a small business marketing agency and you’re the figurehead, you know that people are buying from you and not from your company. Putting a face to the business is one of the most powerful and effective ways to build confidence and earn the trust of prospective clients. Plus, it’s an effective way to educate clients about your agency’s area of specialization.
I often see agencies wasting their time on their company logo, name, and website. I always tell them that customers are buying from them and, therefore, need to trust them as a person. Sure, a website, logo, and memorable name all help, but they can only do so much for your business. Agency clients want to feel they’re doing business with an individual or team they can trust. That’s where a video marketing strategy can help you cut through the noise and stand out.
Using videos, you as an agency owner can talk about things that are important to you and why you like working with your lighthouse client. It doesn’t have to be some crazy story or fancy production, but it must be impactful enough to build trust and show leads that you can take care of them like a family.
The WHY Videos
Using the WHY videos, agency owners can infuse their own personal mission into their company’s brand values. It helps them capture the why of their lighthouse clients.
The goal of these videos is not to push a product or a service, but to develop awareness. By sharing personal stories through these videos agency owners can connect better with leads. Thinking in terms of the stage in the marketing funnel, these videos are top-of-funnel, or TOFU, marketing assets.
Here’s an example of a WHY video.
The HOW Videos
Then come the HOW videos. These sets of videos specifically need to be made with an aim for your marketing agency to share its expertise online with prospective customers.
Furthermore, these videos not only help in driving up engagement levels, but they also help in establishing you and your agency as a trustworthy source of information among leads. In your sales funnel, these would be middle-of-funnel, or MOFU marketing assets.
Here’s an example of a HOW video.
The WHAT Videos
Finally, we have the WHAT videos. The what is where you’re making a sales pitch. These are the call-to-action videos where agencies get to talk about the product or service that they’re selling.
One of the biggest mistakes I’ve seen agency owners make is to start their lead-generation process with the WHAT videos. That won’t work if you haven’t already established trust with the WHY and the HOW videos. It’s all about using the sales funnel to move prospective customers along to the final point of converting and purchasing your services.
In any sales funnel, you wouldn’t start with the bottom-of-funnel, or BOFU, content. That’s exactly what these WHAT videos are. Once a client has contacted you after viewing a WHAT video, you can use a sales intelligence tool to identify their most urgent needs and begin the sales conversation.
Here’s an example of a WHAT video.
How to generate leads with remarketing
Now that you have your videos for every stage in the sales funnel, the best way to get the most out of them and move prospective customers toward conversion is to have a proper remarketing strategy in place.
Since the core idea behind converting leads into customers is to nurture them and move them "down and across" the consumer funnel, agencies must ensure that every consumer only views relevant videos at each stage of their current buyer journey. In other words, the marketing content they see should appear in the right place at the right time.
How can you ensure this? By mastering the art of remarketing.
Through remarketing, as soon as someone watches 75% of the first WHY video, they should be sequenced to watching the other WHY videos and be nudged towards the three HOW videos.
The next remarketing sequence comes into play when the prospect consumes 75% of a HOW video. At this time, they must be served the other HOW videos, as well as the three WHAT videos. From this point onwards, they must be totally removed from the WHY videos watch list.
If you’re wondering how to generate leads in a specific niche while still maintaining a healthy, robust pipeline, this method is your answer. The WHY videos will capture the prospects that are motivated and inspired by your agency’s WHY, and through effective remarketing, all the most interested prospects will move along the funnel and be likelier to convert. Then, with the right white-label tools, you can serve their needs at scale regardless of how many new clients you sign on.
When it comes to generating more leads, combining the process of determining your Lighthouse Client along with creating the WHY, HOW, and WHAT videos is a powerful strategy for agencies.
Going back to the restaurant owner example, when other restaurant owners see you sharing personal restaurant-specific experiences, they will connect more with you since they would feel that you’re one of them and someone who understands them and their unique business challenges.
In fact, this is the major reason why I believe that coming up with a B2B lead generation strategy is one of the easiest problems to solve. Using the magnified power of creating videos against that one target can help you create a ton of content and absolutely kill it.
If you’re worried about how to start creating these videos, don’t be. You can download a walkthrough document (below) that contains a detailed template and some script examples about how to create the WHY, HOW, and WHAT videos.
So, what are you waiting for? Find your lighthouse client, make those videos, and get started on generating leads for your business to thrive.