Learn the basics of lead generation, how it can help your startup, and how to accomplish this vitally important task for any new business.
The word lead figures prominently in our article about sales funnel. You will notice it as well when reading all sorts of articles about digital marketing.
What is a lead?
Why are leads important?
How can we generate our own leads?
These are some of the questions that we will answer in this article, so sit back, relax, and start learning about lead generation.
What lead generation?
A lead is simply any person who expresses interest in paying for a product or service of your business. Leads are usually discovered when they submit information that you can use to contact them in the future; for example, they might sign up for an offer, a trial, or even a subscription to an email newsletter. You receive their name, their contact information, and other basic information that you can use to make a basic profile of them and predict which of your products or services might be the best fit for them. Through these actions, they have signified that they are interested in what your business offers.
However, this interest does not come from thin air. It is generated through different methods. This process is called lead generation. Lead generation is the process of attracting prospective customers to your business, converting them into leads. Afterwards, you nurture the leads to eventually nudge them to become paying customers who actually purchase your products and/or services. (insert link to sales generation once published)
Any method that increases awareness qualifies as lead generation. The following can be used for lead generation:
Email marketing and newsletters
Social media marketing
Live events and seminars
Website landing pages
At this point, you might conclude that brand awareness=lead generation. However, some of these steps overlap with the second step in the sales funnel, which is interest generation. Thus, lead generation is a longer process than simply brand awareness. Additionally, not all who are in the brand awareness stage of the sales funnel are leads; they still need to express interest in paying for your product or service to qualify as a lead.
Why do you need lead generation?
In the previous articles, we talk about the advantages and benefits of doing certain methods, strategies, or using certain tools. Saying that a certain action has advantages or benefits may make an impression that it is not absolutely necessary but will nonetheless be beneficial to your bottom line. For this case, it is best to frame lead generation as a need because of the following reasons:
Collect more data about the target market
The process of lead generation involves gathering more refined data about your prospective leads. This data can be collected and processed through data analysis methods to uncover new details about your target market that are relevant to your business. As you continue lead generation, you are gathering more data that may even help you see how the trends in your market change over time, allowing you to stay ahead of your competition.
Target the right prospects
Lead generation involves using methods that allow businesses to target certain segments of their market that will respond more positively to their marketing campaigns. From these segments, you can even identify those who are most likely to respond positively to your communication, called quality leads.Targeting quality leads results in higher conversion rates and ROI. However, they can be time-consuming and do not always assure 100% conversion success.
Further increase brand awareness
Lead generation allows you to supply additional information that a prospective lead may need to finally be converted to a paying customer. Depending on your industry, this information can either be buried somewhere in your website or is unavailable, but it is relevant to your prospective lead.
Additionally, marketers use several channels at the same time to increase brand awareness of their brand. However, it is only through direct communication with their prospective leads that another powerful channel can be used: word-of-mouth. Knowledge of your brand and the products and services you offer can only be transferred through word-of-mouth if your prospect has direct communication and experience with your business. Word-of-mouth is important because testimony can be more powerful than cold facts.
What are the types of leads?
There is no single way of classifying leads. We will discuss three ways of classifying leads.
How qualified the lead is
The most common classification involves how qualified the lead is:
Marketing qualified lead (MQL) - leads who engage with the marketing team’s efforts but did not initiate actions that indicate that they are ready to become leads. For example, they include those who filled out a landing page form to access an ebook you offer or subscribe to your email newsletter.
Sales qualified lead (SQL) - leads who have taken actions that indicate their interest. One way to do so is when a MQL starts to inquire more about a specific product or service your business offers.
Product or service qualified lead (PQL) - leads who are ready to pay for your product or service. This includes leads who have availed of a free trial of your product or service.
Conversion qualified lead (CQL) - leads who have been converted through your website.
The progression of a lead from MQL to PQL is only possible through nourishing it. The time it takes for the progression to occur will depend on the individual lead; some may quickly progress, while others may seem stuck on a specific step for a long time. Others may drop out of the funnel entirely! It is just how the market works; as long as you improve your marketing and sales strategies, you can even attract former leads back and convert them to paying customers.
How enriched the lead is
Once you acquire a lead, you need to enrich it so that it slowly progresses to become a paying customer. The process is not gradual, and can require you to gather important information that will help you make a refined marketing strategy to convert your lead to a paying customer. For that, you can classify your lead as either a non-enriched or an enriched lead:
Non-enriched lead - leads for which you only have basic information such as the name and a contact method, usually an email address. These are enough to get started with your lead.
Enriched lead - leads where you have more comprehensive information such as their work, their preferences, their business, etc. This information can be used to formulate a refined marketing strategy that can successfully convert the lead to a paying customer.
There is an exchange that occurs in the process of enriching your lead. Your leads will only be willing to share information relevant to you if you are giving information relevant to them; thus, the lead is also enriched by gaining information about your products and/or services.
As always, the information you collect in the process can be sensitive. You should take precautions to secure the database you use to hold such information.
How the lead was acquired
With the diversity of marketing channels that can be used, certain strategies can work for a group of potential leads while others require a different strategy. For example, blog posts appeal to a certain subset of your market, while social media content can reach another subset of your market. Even the manner in which a lead becomes aware of your brand can differ; some did so through organic searches while others did so through ads targeted at them. As such, we can classify them into two types:
Inbound or warm leads - leads that discovered your brand by themselves. They usually do so through organic search. Some examples of content that you can use to attract inbound leads are the following:
Guides and ebooks
Pillar pages and content clusters
Social media posts
These types of content can work passively by being listed and indexed by search engines.
Outbound or cold leads - leads that were generated through targeted campaigns. One example is through paid ads that target a specific audience. Some of the content types used to generate outbound leads are the following:
Paid search and social media ads
TV radio ads
Direct mail and cold email
These types of content are those you may consider as more traditional forms of attracting customers.
How is a lead qualified?
No two leads are created equal, even if they fit the same buyer profile and come through the same marketing channel. You need to assess them using a set of criteria that will allow you to quantify how qualified they are as a lead. You can start lead qualification as soon as you start directly communicating with the prospect lead. Through the process, you will be able to identify if the lead is a qualified lead or not.
Important in qualifying leads is a consistent framework that you can use to score leads and compare them quantitatively. Some of the frameworks are as follows, verbatim from Marketo:
BANT is a good choice for brands whose products or services are expensive and don’t fit within the budgets of all buyers. This is as well as B2B brands, where decision-making authority and multiple influencers are important parts of the sales process.
Budget. Does the product or service fit the prospect’s purchasing budget?
Authority. Is the prospect in a position to make a decision about the purchase or would someone else be the decision-maker?
Needs. To what extent does the prospect need what you are selling? Are they just exploring or is there a pressing need to make a purchase?
Timeline. How ready is the prospect prepared to purchase?
The CHAMP technique is a good fit for situations where some leads don’t understand what you are selling. Identifying prospects’ challenges first and then determining whether there is a fit with the product or service being offered helps sales teams to quickly disqualify leads who don’t need what you are selling.
Challenges. Does what you’re offering solve the problems which a prospect experiences in their day-to-day activity?
Authority. Is the prospect the right person to speak to regarding the company’s decision-making process on purchasing?
Money. Does the prospect have the budget in place to consider purchasing what you’re offering?
Prioritization. Is the issue you’re offering to solve high up on their list of day-to-day problems?
MEDDIC works well for teams that have a relatively low volume of high-value sales, such as software vendors selling enterprise contracts worth tens of thousands of dollars each. These teams can afford the time to engage deeply with each lead to collect the information needed to perform MEDDIC qualification.
Metrics. In quantifiable terms, what is the customer hoping to get out of your solution? Is it to increase revenue by a certain percentage every year, for example?
Economic buyer. Who is the person who makes buying decisions?
Decision criteria. What are the buyer’s criteria for determining whether to make a purchase?
Decision process. Which process does the buyer follow when evaluating a potential purchase?
Pain point identification. Which challenges is your buyer seeking to solve?
Champion. Is there someone inside the buyer’s organization who already believes in your product or service and can serve as a ‘champion’ for it?
ANUM is a good strategy for brands that sell to groups where decision-making authority is not always clear, such as startup companies that don’t have a well-ordered purchasing process in place. Organizations like these may struggle to determine who must sign off on a purchase before the sale is complete.
Authority. Are you dealing with the decision-maker for product or service purchases?
Need. What are their needs and will your product help to solve them?
Urgency. Is your contact ready to make their mind up now on a purchase or will they need further communication?
Money. Is the budget in place to make the sale?
FAINT works well for prospects who may not know that your product or service exists in the first place, such as those you would normally reach through cold calling
Funds. Does the prospect have the funds in place, or a budget to spend on your service?
Authority. Is your lead a decision-maker on purchases and spend?
Interest. Have you made them aware of how your service can improve their day-to-day work?
Need. Do they have a need for what you’re selling?
Timing. Is this the right time to make your approach?
What are the steps in developing a lead generation process?
You may think that lead generation is a simple process of deploying content to attract leads, but a successful lead generation process maximizes the potential conversion rate and ROI. You need to work smart to achieve that. Fortunately, there is a procedure you can follow to create a successful lead generation process. Here are the steps:
Define what makes a good lead
Do you know what you are looking for? If not, it is easy to get lost while wasting effort chasing wrong leads. You should first identify what makes a good lead by doing the following:
Conduct market research to gain a profile of your target market
Analyze your past and current customers and identify what makes them a paying customer
Identify segments of the market that you want to target
Through these steps, you will be able to create a profile of a good lead, which you will use to subsequently guide you in the process of lead generation.
You then use the results of market research and analysis of past transactions to create content that will be most effective for the segments of the market that you want to target:
Identify what marketing channels are most effective in attracting leads
Conceptualize what is the best content for the identified channels
Conduct initial testing for the content before deploying it
Some of the most common channels used are the following:
Search Engine Marketing (SEM)
Search Engine Optimization (SEO)
Besides content for multiple marketing channels, you should also design your landing pages. Landing pages serve to cater traffic you acquire through marketing channels. Landing pages can contain a call-to-action that will push traffic to the next stage of your funnel. In the context of lead generation, this is where you start identifying leads. Call-to-action depends on where the traffic came from; it can be one of the following:
Ask users to sign up before downloading an ebook guide
Subscribe to your email newsletter that contains exclusive promos
Preorder a new product
Send contact details for inquiring about your products and/or services
Landing pages are very important for lead generation because this is where users will have a choice to willingly sign up for whatever you offer, thus identifying themselves as leads! Of course, that’s not the end of the story, but rather the beginning of the journey of a lead.
Build a roadmap
You should next qualify your lead and nurture them to be converted to a paying customer. This can be as straightforward as a single call providing them information about your products and services with offers fit for their case or can even become an elaborate dance that can take weeks or months. Whichever is the case depends on the nature of your business and the industry you are part of, which can be identified through market research.
The information you gathered from market research will help you determine how long the roadmap is, and even create several roadmaps that your lead may take in order to be converted to a paying customer. You can even conceptualize the roadmap as a funnel, just like a sales funnel! The lead generation funnel has three levels:
Top of the funnel - where you build awareness to a problem that needs to be solved
Middle of the funnel - where you help teach how to solve the problem
Bottom of the funnel - where you offer your products and services as the solutions to the problem
Important in building a roadmap is being able to identify where and when a lead can be transferred to the sales group for a more thorough nurturing. Establishing a lead qualification system is essential to this purpose. This is discussed in the previous section. Therefore, both the involved marketing and sales groups must coordinate in this step of the process.
Deploy content and roadmap
After you finish the content and the roadmap, it is time to deploy them through a marketing campaign. The deployment can take weeks and months.
Measure and optimize
When you deploy the content and roadmap, you should include trackers that will enable you to measure and assess how successful your content and roadmap is. Using the information, you should continue optimizing your lead generation strategy through techniques such as A/B testing.
What are the tools used for lead generation?
At this point it is clear that a set of tools designed for different tasks are necessary to ensure lead generation runs smoothly. Some of the necessary tools are the following:
Advertising tools: deploys ads and lead magnets through different marketing channels
Landing page tools: converts traffic to leads
Email marketing tools: manages email dispatches and campaigns, also for nurturing and converting users in the mailing list to leads
Customer relationship management (CRM) tools: helps you manage all customer information you gather throughout their journey through the sales funnel
Sales process management tools: helps you manage sales, from the products and services to tracking sales being done over time
Live chat and other communication tools: helps you manage communication with leads and existing customers
Lead qualifying tools: helps you analyze leads and score them to determine whether they are qualified to be transferred to your sales group
Analytics tools: helps you consolidate and analyze data from different eCommerce and marketing platforms to find trends over time
If you prefer an assortment of tools for managing your lead generation process, I recommend you check out Lido for analytics tools. Beneath its relative simplicity as a spreadsheet software lies robust tools for consolidating data from different platforms such as Facebook Ads, Google Ads, Mailchimp, and Shopify. We already published several tutorials on how to import data to Lido:
There are best practices that you can follow to maximize the success rate of your lead generation process.
Implement live chat
While emails work well as a way for users to inquire about your products and services, there is a level of uncertainty on when you will respond via email. Adding a chatbox to your website serves well to assure the users that you can respond quickly. Of course you need to put someone behind it to respond within minutes! If not possible, you can set up an AI chatbot that will gauge what the user is asking about and then provide the relevant answer. This will help you handle most of the inquiries. If the questions asked are something that you need to personally address, the chatbot will forward it to you to be able to answer more precisely. At this point, you are ready to convert the user to a lead and nurture it until it becomes a paying customer.
Encourage online reviews
Online reviews give your existing customers a way to make an honest assessment of your products and services. In general, perspective customers, which include your leads, will consult the online reviews, and will look at two things:
The quality of your products and services given its price
How reliable you are
Your business is not perfect and it is rare to get a perfect 5-star aggregated rating for a business, but you should always encourage your customers to be honest in their online reviews. The rating may not be as high as you expect, but that gives you room for improvement, which will help you in the future.
Show social proof and testimonials
You can use the best online reviews as material to show proof and testimonials for your products and services. Testimony is more powerful than cold data, and adding testimonials to your website will entice the users to consider your products and services. Additionally, adding testimonials allow them to see how powerful your products and services can be - thus giving them an idea of the possibilities that your business offers to their ends.
Be active on relevant communities
If your business targets a specific niche, it can be better if you become active on the relevant online communities rather than run marketing campaigns through different channels. This is because you go straight to interacting with your target audience, thus allowing you to easily get close to them and go straight to converting them to leads. Specifically, you get the following benefits:
You may not have to exert much effort in stirring interest in your products, as there is already an existing customer base that is interested to try your products.
Since you target a narrow market already interested in your products, those customers will be more likely to buy your products.
You intimately know your customer base, so a better personalization and customization of product offers are possible.
Optimize for mobile devices
Finally, technical improvements to your website will go a very long way in increasing your conversion rate. This means optimizing your website for mobile devices. It must be frustrating if you have done a brilliant marketing campaign only for your leads to back out at the last minute because your website was not exactly in its best shape, right? To ensure that your website is optimized for mobile devices, you need to make sure that your website is responsive, lighter, and neat and easy to use. You can start with the following: