In what circumstances are people building a list versus just going out and direct selling their product or service?

For the last few months, I've been doing a lot of consulting in the area of sales process re-engineering. Basically, sitting down and looking at and re-defining a company's sales process. Typical client is a company with $200 to 300 million in sales.

This wasn't my intended market, I sort of wandered into this market. I wanted to work with smaller companies, 1 to 50 employees, doing similar work around sales process and follow-up (along with a bunch of other jazz).

I've develop a info product and I licensed another, that all relate to selling and small business. I would like to focus on selling info products versus consulting, to small businesses. Product price points one at $67 and another at $247.

Here's where I'm stuck, when it comes to marketing, should I focus on trying to direct sell product or build a list by giving away free "widgets"?

Once I know that a party is interested, since they requested the widget, I add them to a sequence and keep following-up.

Of course this is just sequence or multi-step marketing, but ecomonically, what's the best way to look at the numbers around both methods?

Or maybe I've just been over analysising this too much. Why can we give better advice to others, and screw it up when we ask ourselves??

Thanks for the help----
MikeC

Mike, you gotta do both...

You gotta bust your butt to get them in the sales letter... and have a great series for the list.

Heck, I think you should find ways to go for multiple lists. Freebie list... (to get them to buy) buyer list (to get them to upgrade) and upgraded list (to sell even higher margin products in the future.)

MikeC there is no correct answer on this one. At least none until you've tested both methods. Heck, both methods have merit and have been used successfully by thousands if not millions of business owners.

In some ways lead generation is easier in that it's easier to sell folks stuff once you've had some sort of relationship with them-- even one where a freebie has been given. The hard part is the creation of multiple marketing pieces needed to not just get someone to accept the freebie but to sell them items that they actually have to lay out their hard earned cash for. This system also takes some time to create sales. People don't go from freebie seeker to lay-out-the-cash buyer overnight.

The easy part of "Here it is, buy it" is that you're only one marketing piece away from making money. The hard part is that it, as anyone here knows, creating a marketing piece that sells at a profit isn't always easy.

You could also use the "Self Liquidating" lead generation method where the prospect pays a very small amount for a product in order to allow you to recoup some of your marketing costs while you generate leads.