Why I stopped caring about lead magnets and why you (probably) should too!

If you’ve been in the Business-to-business (B2B) marketing game for a while, you’ve probably heard about or even used lead magnets. They’re the go-to strategy for building your list and attracting potential customers.

You know the drill: offer something valuable for free; in return, people give you their email addresses. Sounds simple, right?

But here’s the catch—just because someone downloaded your freebie doesn’t mean they’re ready to buy. Leads gathered through these methods often stay at the top of your funnel. Then, you have to work to move them down the funnel.

That’s great, except transforming potential customers (leads) into actual customers is not always straightforward. While lead magnets are great for building your list, they don’t always move leads to the buying stage. In this post, I’ll explain why initial customer offers could be a better way to convert leads into paying customers quickly.

The Typical B2B Marketing to Sales Cycle

In B2B marketing, the sales cycle is known for being more intricate and drawn-out than in B2C. That’s because B2B buyers typically need to make decisions that impact entire companies, meaning multiple stakeholders are often involved, each with their own concerns. The process starts with marketing generating leads, usually through channels like content marketing, email campaigns, or paid ads. These leads are then passed to sales for nurturing, where the real work begins—building relationships, addressing pain points, and guiding prospects through product evaluations.

At this stage, sales teams spend significant time qualifying leads to ensure they’re a good fit. This involves assessing the lead’s needs, budget, decision-making timeline, and whether they align with your product or service offering. A key challenge here is timing—many leads may not be in the right stage of their buyer’s journey, making the process slow and frustrating for sales reps. In fact, CSO Insights reports that 53% of B2B sales organizations don’t meet their quotas due to prolonged and inefficient sales cycles.

The nurturing phase often involves multiple touchpoints: product demos, case studies, or personalized follow-ups. For many businesses, this nurturing can take months as prospects deliberate, compare alternatives, and negotiate with internal teams. Even once the lead is deemed sales-qualified, there’s still the negotiation and contract phase, adding more time to the cycle.

With pipelines full of leads who aren’t yet ready to buy, the process can stall, leaving businesses feeling stuck. Marketing generates interest, but if sales can’t push leads further down the funnel, it becomes a game of waiting and waiting for the right moment when prospects are finally ready to purchase.

This cycle is why an initial customer offer may be a better alternative. These offers bypass the long nurturing process and get prospects to make smaller, quicker commitments that open the door for bigger sales down the line. Instead of hoping that leads will one day be ready to buy after a free resource, you provide a low-cost, valuable service that turns them into paying customers much sooner.

Typical business-to-business buyer’s journey process

Understanding the Lead Funnel

Let’s be honest—getting people into the funnel is only half the battle. The lead funnel has several stages: awareness, interest, consideration, intent, evaluation, and purchase. Each stage requires a different approach to get leads moving. It’s not as simple as just collecting names and waiting for them to drop down to the purchase stage.

The Challenge of Relying on MQLs

At the top of your funnel, it’s not uncommon to have an abundance of Marketing Qualified Leads (MQLs). These are individuals who have engaged with your content—maybe they’ve downloaded an eBook, attended a webinar, or filled out a contact form. They’ve shown interest, but here’s the thing: they’re not necessarily ready to buy.

While MQLs are valuable, they’re only the starting point. The goal is to nurture these leads, guiding them through personalized content and touchpoints until they become Sales Qualified Leads (SQLs). An SQL is a prospect who has demonstrated serious intent and is now ready for direct communication with your sales team.

However, the reality is often less than ideal. According to Gartner, about 21% of MQLs convert into SQLs. That’s a considerable investment of time, energy, and resources for a relatively small payoff. The nurturing process can take months, and many leads fall off along the way. Some lose interest, others find alternative solutions, and many are simply not in a position to buy at that time. This is because SQLs need to become opportunities, and opportunities need to close as a sale to become a customer. Therefore, the number of potential customers keeps dwindling as you move further down the sales funnel. This delay is especially problematic if you’re a startup or small business without the resources to keep nurturing leads for months on end.

Why Lead Magnets Sometimes Fall Short

Lead magnets are undeniably effective at grabbing attention—they’re great for top-of-the-funnel activities like building awareness and generating interest. However, the real challenge comes after that initial spark of curiosity.

Once a lead downloads your free resource or signs up for your webinar, the process often stalls. You’re now left with a name and an email, but that’s just the beginning of the journey. The prospect might not be in the buying mindset, and you need to launch nurturing campaigns to keep the momentum going.

The problem? Even the best-crafted lead magnet can fall flat if the timing isn’t right.

Here are some key challenges businesses face when relying heavily on lead magnets:

1. Leads Aren’t Sales-Ready: Just because someone downloads a whitepaper doesn’t mean they’re ready to make a purchasing decision. Many MQLs enter the funnel in the awareness stage, where they are simply researching or gathering information and are not looking to buy anytime soon. You may spend months nurturing them with content, only to find out they’re not your ideal customer after all.
2. Low Conversion Rates: Even if you’ve generated a lot of leads, the conversion rates from lead magnets to actual paying customers can be underwhelming. According to HubSpot, only around 20% of marketing leads become sales leads, and even fewer convert to paying customers.
3. Nurturing Fatigue: The nurturing process requires a significant amount of time, effort, and resources. You need to keep following up with personalized emails, targeted ads, and additional offers—all of which can feel like a guessing game if the prospect isn’t actively engaged. Over time, this can lead to “nurturing fatigue,” where leads lose interest before moving further down the funnel.
4. Content Overload: Many prospects are bombarded with content offers every day. When everyone is offering free guides, checklists, and templates, it becomes harder to stand out. If your lead magnet doesn’t deliver immediate, actionable value, it risks being forgotten or ignored amid the sea of content they’re already consuming.
5. Lack of Commitment: One of the biggest challenges with lead magnets is that they’re free. While this makes them an easy way to attract leads, it also means there’s little to no commitment from the prospect. When something is free, there’s often less perceived value, and prospects may not be as invested in following through.
6. Delayed ROI: While lead magnets can bring in large volumes of leads, turning them into revenue takes time. You might have to nurture these leads for months or even years before they are ready to buy, and by then, their needs or priorities might have changed.

My Experience with Lead Magnets

In my personal experience, lead magnets don’t always lead to high-scale conversions. One of the lead magnets I currently offer is the Brand Perception Survey, and while people love it, it doesn’t always turn into paid consultations. They take the survey and potentially use it as part of their brand perception analysis process (or don’t). And we all know we download a lot of stuff we don’t use.

Instead, I could offer something more tangible, like a low-cost brand strategy session. This not only gets them into my services faster, but it also gives me a paying customer. It’s a win-win because the customer doesn’t have to invest as much to see if the service could be of value, and I don’t have to wait for a long nurturing process to end before I potentially get a sale.

The same goes for my Lead Scoring Guide. While it’s my most downloaded resource, it doesn’t always result in consultations for creating a lead-scoring model. But what if I paired that guide with a marketing automation audit at a minimal fee? That’s a much more direct way to bring in clients.

Lead funnel in business-to-business marketing

Why initial customer offers work better

Now, imagine this: what if you offered a small, low-cost version of your service instead of just giving something away for free? This is what I call an initial customer offer. It’s a perfect way to attract leads and turn them into paying customers right away. It’s quick, easy, and best of all—it’s a faster path to conversion.

This business model and customer acquisition process is often seen in the software world with freemium models but needs to be taken advantage of by business-to-business services. Our service offers can be highly customizable, and it is challenging to give a “trial version.” Yet, I employ you to think deeper into what you can offer at the lowest possible commitment. Something where perhaps, if your service requires multiple stakeholders to sign off, one person could because the cost and impact appear to be so minuscule.

The great news is that, for those of us who do not directly offer software services, we can still utilize modern technologies like AI and no-code solutions to create automated versions of our humanized services. This can lead to an easier way to introduce your services without investing human resources into initial “free consultations or reviews,” which can be just as costly, depending on your service.

Technology-driven examples of initial customer offers for B2B service businesses.

HR Consulting Firm:

Offer an AI-powered resume screening service to help businesses quickly filter candidates. Using AI, the firm could analyze resumes for fit and provide an initial shortlist.

• Why this works: A business utilizing this service would be filling a job role. Providing this type of resume service at a minimal fee creates brand awareness for more services that the HR firm could offer, including the need for the company not to do its screening.

Marketing Agency:

Use no-code tools like Zapier or Integromat to set up automated lead-nurturing workflows for clients. This can be offered as an initial setup, allowing businesses to experience process automation.

• Why this works: This service allows the customer to see value instantaneously, making it easier to sell a more extensive marketing automation consulting process setup.

Law Firm: Provide a legal document review using AI, where an AI system reviews contracts for compliance or risk, offering businesses a quick, low-cost audit of their existing documents.

• Why this works: This service allows for more straightforward client help, and clients who don’t need legal representation still get services from a Law firm. In addition to the brand awareness gained, other legal services can be introduced.

Accounting Firm:

Offer an AI-driven expense categorization service to help clients streamline their bookkeeping. Using AI, the firm could categorize expenses and identify cost-saving opportunities in a simple report.

• Why this works: categorizing expenses is often the start of getting your books in order. If clients like the categorization services offered, they might also look to get more services, including working with a human accounting professional.

Supply Chain Consultancy:

As an initial offer, use AI to optimize inventory management. The consultancy could leverage AI tools to analyze a client’s inventory data and provide actionable insights for improving stock levels or reducing waste.

• Why this works: This quick-win solution demonstrates the consultancy’s value by offering immediate, data-driven results, making clients more likely to engage in deeper, long-term projects. It’s a low-risk, high-reward service that builds trust early in the relationship.

Real-Life Service-Based Examples of Initial Customer Offers

1. Brafton: Offers a low-cost content marketing strategy session.
2. Blue Beyond Consulting: Provides an organizational health check.
3. The Goss Agency: Offers a brand audit at a nominal fee.
4. Accelerate Consulting Group: Provides a business process audit.
5. Acuity Consulting Group: Offers a financial health check.

These companies provide initial customer offers that allow leads to experience their services without requiring them to make a considerable commitment immediately.

It’s a perfect “try before you buy” scenario.

Initial Customer Offers vs. Lead Magnets: What’s Right for You?

Now, you might be wondering which is better for your business: lead magnets or initial customer offers. Well, it depends on your goals.

When to go with lead magnets:

Lead magnets are great if you want to build an extensive list for nurturing.

When to go with initial customer offers:

However, initial customer offers are the way to go if you want to convert leads into paying customers quickly.

Here’s a quick comparison to help you decide:

Conclusion: The Need for Both Strategies

Both lead magnets and initial customer offers have their place in a solid B2B marketing strategy. But if you’re looking for a faster path to sales—especially if you’re a startup or a smaller company—focusing on initial customer offers might be the way to go. They attract qualified leads and allow you to prove your value early on, turning leads into paying customers without the long nurturing process.

Ready to Build Your Initial Customer Offer? Let’s Brainstorm Together!

If you’re looking for a faster way to convert leads into paying customers, let’s brainstorm some creative and effective initial customer offers tailored to your business. I’m offering a 1.5-hour consultancy session to help you discover actionable ideas to drive quick results.

Here’s how it works:

1. Initial Analysis: We’ll start by reviewing your current sales and marketing approach to identify opportunities for initial customer offers.
2. Tailored Brainstorming: Together, we’ll come up with creative, low-risk offers that align with your business model.
3. Actionable Strategies: You’ll leave the session with concrete, actionable ideas you can implement immediately to engage leads and turn them into customers.
4. Expert Guidance: I’ll walk you through how to structure your offers, ensuring they provide value while attracting more qualified leads.

What’s in it for you?

• Discover new, creative ways to attract paying customers fast.
• Learn how to reduce lead nurturing time and increase conversions.
• Tailor offers that are scalable and easy to implement.

Book your session today, and let’s transform your lead-generation strategy →

P.S. If I don’t have any ideas about what you can offer, I’ll happily refund your consultation fee.

Frequently asked questions about lead magnets and initial customer offers

1. What is the difference between lead generation and lead magnet?
   Lead generation is the overall process of attracting leads, while a lead magnet is a tool used to entice leads by offering free value.
2. How does demand generation work?
   Demand generation is about creating interest and awareness, often through content marketing, advertising, and other strategies to move leads through the funnel.
3. What is an example of demand generation?
   An example of demand generation is hosting a webinar that educates your target audience, followed by a low-cost consultation offer.
4. What are the steps of demand generation?

1. 1. Create awareness (e.g., blogs, ads, webinars).
   2. Engage prospects (social media, emails).
   3. Nurture leads (follow-up content, offers).
   4. Convert leads (direct offer, sales calls).
   5. Measure and optimize results.

5. What is an initial customer offer?
   An initial customer offer is a low-cost, entry-level version of your product or service that gives potential clients a taste of what you offer. It’s designed to convert leads into paying customers quickly.
6. How is an initial customer offer different from a lead magnet?
   A lead magnet is usually free and focuses on gathering contact details, while an initial offer is paid, providing immediate value and qualifying leads faster.
7. Why should I use initial customer offers?
   They help filter out unqualified leads, establish trust early, and shorten the sales cycle by moving leads directly into a paying relationship.
8. What are examples of initial customer offers?
   Examples include a low-cost audit, a strategy session, or a starter package using AI tools, no-code setups, or personalized consultations.
9. How do initial customer offers benefit service-based businesses?
   They allow businesses to showcase their expertise, build client relationships, and generate quick revenue while minimizing risks for the customer.
10. How do I price my initial customer offer?
    Pricing should be low enough to attract clients but valuable enough to demonstrate your expertise. Aim for a price point that’s accessible and low-risk for new clients.
11. Can initial customer offers work for all industries?
    Yes! Initial customer offers can be adapted to nearly any industry, from consulting to marketing, by offering scaled-down versions of your services.
12. What should I include in my initial customer offer?

Focus on providing a small but valuable service that’s easy to deliver, solves a specific pain point, and aligns with your core offerings.