Getting people to buy from you is hard work. It takes times, money and energy to take an individual who knows absolutely nothing about your products or services and turn them into a paying customer.
In fact, generating leads is the #1 challenge of all businesses:
As an entrepreneur, you need to introduce your brand to people who have never heard of your company – and who may not even realize they have a problem in need of solving, so you can begin the process of convincing them that your product or service is of value.
When you think of how difficult just this first step of the process is, it’s no wonder that generating an actual sale is so rewarding when you’re running a business.
Now, I don’t mean to dissuade you. Not in the slightest. Sure, generating leads isn’t easy. But it doesn’t have to be difficult, either.
A strategic approach to lead generation can not just increase the number of potential customers who will buy from you, but it can also increase the quality of these customers as well.
In this post I’ll show you how to generate leads for your company, how to judge the effectiveness of your lead-generation campaigns and how to determine which of your leads have the highest potential of becoming paying customers.
Before we get into all of that, though, let’s start from the beginning with the basics…
What Is A Lead, Anyway?
Technically speaking, a “lead” is someone who is in the first stage of the buyer’s journey.
In simpler terms, a lead is an individual (or organization, in the case of B2B companies) that could potentially become one of your customers.
Now, this isn’t to say that just anyone can be considered a lead. In other words, just because a person is alive and breathing doesn’t mean you can define them as a lead. In fact, you shouldn’t do this, for reasons which will become evident as you read through this guide.
Typically, for an individual to be considered a lead, they’ll need to have shown some kind of interest in a brand’s services and engaged with the brand in one way or another.
However, many organizations consider the intensity of the initial engagement when determining whether or not to define a person as a lead to begin with. As a rather simple example, while one clothing store might consider a person who stopped in front of their window to read a poster to be a lead, a similar store might only consider those who have walked into their store to be leads.
For the purposes of this guide, we’ll say that a lead is an individual who has shown an active interest in engaging further with a brand, as opposed to someone who is “just passing by.” Once you’ve read through the guide and have a better understanding of the fundamentals of lead generation, you can work on fine-tuning your in-house definition of a “lead.”
Why Is Lead Generation So Important?
Okay…the ultimate answer to that question is pretty obvious: lead generation leads to making sales. Sales make money. Money is good.
But why go through the process of generating leads at all? Why wouldn’t you want to just focus on making sales?
Of course, the answers to those questions is a lot more nuanced. Here’s the deal – the winds have shifted, and the tides have changed.
The modern day consumer doesn’t want to be sold to; they want a solution to their problems. And they don’t want to buy a product that’s made for people “just like them”; they want a product that’s made for them.
Similarly, they don’t want a “typical” customer experience; they want an experience that’s been tailored to their exact needs. They also want an immersive experience with the brands they purchase from, rather than a simple supply-and-demand relationship.
What’s more: due to the accessibility of information today, it’s generally understood that the modern consumer has completed more than half of the buyer’s journey before they even reach out to a representative from an organization.
What this means is that individuals who would be considered leads by an organization often fly under the radar – in turn decreasing the chances of that organization turning them into a paying customer.
This is all to say that you can’t just expect people to want to buy what you’re selling just because you’re selling it and they might find it useful. On that same token, if you wait until an individual is ready to make a purchase to begin interacting with them… well… they probably won’t making that purchase from your company.
The Major Components Of Lead Generation
In this section, we’ll go through the essentials of lead generation, including:
- Inbound and outbound tactics
- Lead generation metrics
- Lead scoring
- Lead nurturing
I’ll also provide you with a number of resources to help further your understanding of each topic.
Inbound And Outbound Marketing
At its core, marketing is all about gaining visibility and promoting your brand. Though there are a number of ways to do that, each falls into one of two categories:
- Inbound marketing or
- Outbound marketing
Here, we’ll explain what each of these terms mean, provide examples of both, and explain the roles each of them play in your overall marketing and lead generation strategy. Let’s start with the more modern strategy – inbound marketing.
Inbound marketing is the practice of attracting an audience to your brand without actually reaching out to specific people within that audience.
Typically, this is done through the creation and presentation of content which your potential future customers will find valuable – and will position the company that created it as a thought-leader within their industry.
For example, a company that sells golf clubs might write a blog post titled “6 Quick Ways to Fix Your Short Game.” Not only would the information provided in this article be helpful to those in the market for a new golf club, but it would also prove to these individuals that the company doesn’t just make golf clubs – it knows golf.
In addition to blog posts, other such inbound content includes:
- White papers
- How-to videos
- Case studies
Inbound marketing content can be made readily available on a company’s website, or it can be placed behind a subscription form on a landing page and delivered via email. For the purposes of lead generation, the latter is preferable since it requires people to actively reach out to you and provide you with their contact information (as opposed to passively reading a blog post and moving on).
Utilizing inbound marketing strategies can be effective for a number of reasons.
For one thing, it aligns with what we said before regarding the modern consumer’s preference to conduct research on a brand and its products before reaching out to a representative of the organization. The more information you provide upfront, the better prepared your potential customer will be to make a purchase once they reach out.
Inbound marketing has also proven to be both efficient and cost-effective. According to data collected by SEOPressor, inbound marketing costs companies an average of $36 per lead (compared to $41 per lead for outbound strategies).
Additionally, 41% of marketers say inbound strategies have lead to an increase in their companies’ overall marketing ROI (compared with only 9% who say it did not).
As we mentioned, inbound marketing is, quite simply, the new way of attracting leads. But that isn’t to say outbound marketing is completely dead…
As you might have guessed, outbound marketing refers to the more traditional approach of reaching out to potential leads instead of getting them to come to you.
Outbound marketing techniques include:
- Cold calling
- Cold emailing
- TV/radio commercials
- Magazine and newspaper advertisements
- Pay Per Click ads (Google Adwords and Facebook)
The main goals of outbound marketing campaigns are to make consumers aware of a brand and to focus their attention on purchasing the products that brand offers.
Though this goes against what we said before about the modern consumer not wanting to be sold to, outbound marketing still has a place in in most companies’ overall marketing strategy.
Can Inbound And Outbound Marketing Coexist?
In short, yes they can. But it’s in how you utilize each strategy that determines whether or not you’ll be successful.
It’s important to explain here that the main difference between inbound and outbound marketing isn’t necessarily the way in which the marketing “happens”; it’s in the purpose for creating the content in the first place.
Outbound marketing is strictly about engaging with potential leads in order to sell to them. Inbound marketing is about engaging with an audience of future potential customers to build trust and strengthen the company-consumer relationship (and, eventually, sell to them).
Looking inward to how these two strategies can work within your organization:
- Inbound marketing allows you to learn more about the type of person that is attracted to the content you produce (in turn allowing you to create additional content that’s tailored to this persona)
- Outbound marketing allows you to target the specific personas you’ve determined to be interested in your brand with paid marketing (instead of casting an incredibly wide net and hoping for the best)
Lead Generation Metrics
Once you begin focusing on generating leads and have started implementing a mix of inbound and outbound strategies, you’ll have a major question to answer:
Is this working?
Of course, that’s just the start of measuring your lead generation initiatives. After figuring out what’s working, you’ll then want to ask yourself “how well is this working?”
To answer that question, you’ll need to assess the following metrics.
Your campaign’s click-through rate (CTR) tells you what percentage of your visitors actually completed the action you wanted them to take when they saw your content, ad, etc.
For the purpose of calculating your CTR regarding leads generated, you’d want to compare the number of people who saw your ad with the number of people who clicked it. If 100 people saw your ad and 5 clicked it, you have a 5% CTR. Simple, right?
Conversion rate is similar to CTR in that it compares the amount of people who reach one stage of engagement with your brand with the amount that reach the next stage (or subsequent stages).
Typically, it’s advisable to consider conversion rates of:
- Visitors to leads
- Leads to opportunities
- Opportunities to sales (or “wins”)
As with CTR, you can also look at your overall conversion rate (visitors to sales), or leads to sales. To keep it simple though, start with visitors to leads and leads to sales.
Return On Investment (ROI)
Implementing the various lead generation strategies we’ve talked about is going to cost some money, both upfront and as time goes on. And you’re ultimately going to want to know if the money you’ve spent was worth the investment.
You can measure the ROI of an individual lead, or that of an entire lead generation campaign. ‘
For individuals, you’d first determine the amount of money you spent generating that lead, then divide that number by the revenue this new customer brought in.
For campaigns, you’d look at how much you spent on the overall campaign and divide it by revenue the entire campaign generated (by considering the amount brought in by new customers that were generated through the campaign).
The process of lead scoring allows you to assess your leads in order to determine which of them have the highest potential to become paying customers.
This enables you to go after the best leads first, rather than wasting time, energy and money on those who might end up walking away without making a purchase.
The benefits of scoring your leads are huge. Because you’ll end up focusing on high-quality leads, you’ll experience:
- An overall increase in conversion rate, because you won’t allow high-probability leads to slip through your fingers
- An increase in ROI, since you won’t be investing time in leads that go nowhere
- An increase in productivity; the “free” resources you’ll have (mainly time, because you aren’t chasing dead ends) can be reinvested into finding even more high-quality leads
To begin scoring your leads, you’ll want to consider the following factors:
- Persona/segmentation data: How closely does a lead align with your target persona?
- Engagement/behavioral data: How has the lead engaged with your company? Here you’d look at the type of engagement (e.g., blog comment, mailing list signup, phone call, etc), as well as the frequency and timing of their engagements
The way in which you prioritize all of this data depends on in-house decisions, such as your focus on specific persona data and your organization’s definition of a lead.
As a simple example, if your target persona is “a 30-something dentist”, would you prioritize a lead’s age, gender, or location? Or, to get a bit deeper, how would you “trade off” certain attributes ( a 25 year old male dentist from New York versus a 32 year old female dentist from California, for example)?
After you’ve attracted a lead, your next order of business is to nurture them. As the name suggests, lead nurturing is all about encouraging a person to become a paying customer.
Notice that we use the words “nurturing” and “encouraging” rather than “coercing” or “compelling.” This is because, quite simply, you’re not trying to trick people into doing something they didn’t want to do; you want them to eventually come to the point of purchase through their own free will.
When nurturing leads, your goal is to engage with them on a deeper level and to forge a relationship with them in a way that shows you truly care about their needs. This involves:
- Listening to them intently to understand exactly what they hope to accomplish or overcome
- Providing information, education and assistance in any capacity you can
- Knowing exactly what you can do to solve their problem – and doing it
Of course, this is just a basic overview of the process involved nurturing leads, but hopefully you get the idea.
There are no paying customers without leads. And you’ll find it hard to get leads if you don’t engage in marketing. So whether you use inbound or outbound marketing methods, get started ASAP and test, test, test. Test your marketing channels, test how you can best turn a stranger into a lead and test the right approach to nurture your leads into paying customers.