How lead generation works and how does it benefit your business?
“Lead generation”, you’ve probably heard these words before. It is one of the marketers’ favorite terms, and rightfully so as it is a key player in business success. According to a study conducted by Marketo: “companies with good lead generation practices achieved 133% more revenue than those that didn’t have them”. But, what are the benefits of lead generation?
Despite many marketing professionals understanding the importance of working with qualified leads, most of them don’t apply their knowledge to integrate a lead generation strategy into their client’s lead funnel to increase the amount and quality of incoming leads.
In this article, we will give you an overview of what constitutes lead generation, how it works, and why it will help you save time and money by allowing the sales force to convert leads into sales.
How lead generation works and is it the same as prospecting?
When we hear the word: “sales” we picture a representative talking on the phone looking to get new clients, jumping in and out of meetings, and writing cold emails to get their foot on the door. This is what prospecting is, sales reps doing their job.
But there’s a simpler, more effective way to drive sales.
Lead generation is the act of developing a sales pipeline by cultivating new potential buyers as they gain interest in your brand. These digital marketing strategies are carried out by the marketing department, in which a wide net of content and messages is cast to attract people with specific interests and place them into the lead funnel to become a customer.
Lead Generation works wonders for both B2C and B2B.
Ultimately both strategies have the same goal: to drive revenue. But the main difference lies in how the business-customer relationship flows. Prospecting is the company reaching out to potential customers and lead generation is the company becoming discoverable for interested individuals to approach it.
How do Prospecting and Lead Generation work?
Prospecting is a one-to-one activity in which sales reps are actively looking for buyers through cold calling, outward emailing, or direct messaging on social media. These outbound tactics take time, create a short-lived impact on the recipient, and have a high chance of being unsuccessful. It is unknown if the person they are reaching out to is interested in the product or service.
Lead Generation works the other way around. It is an inbound approach where content such as blog posts, social media posts, podcasts, YouTube videos, and more are used to build brand awareness, engagement, and ultimately have the visitor complete a desired goal such as providing the business his/her contact information. Once the person has taken action, it becomes a lead and starts their journey through the sales funnel.
Who does Lead Generation reach out to?
Unlike prospecting, lead generation’s heart lies in understanding: purchases are driven by unique desires and needs. One of the first stages of a lead generation strategy is to define your ideal customer and what motivates them to buy. A better understanding of business personas yields better results. Sales teams can focus their efforts on those who meet key criteria as it suggests they are most likely to make a purchase.
Defining a business persona helps brands and teams to:
- Choose the most appropriate channels to communicate
- Develop targeted content and personalized messages
- Select relevant lead magnets
- Determine who has the biggest buying intent
Lead generation gives any business the ability to sell effectively without wasting resources. How many times have we seen a buyer getting cold feet at the last second? In prospecting the sale depends on the buyer, whereas with lead generation the customer has already made a choice: You.
Generating Leads: Ask questions first, sell later
We’ve talked about leads, but not about how to effectively generate them. Potential clients aren’t just going to hand over their contact information for you to sell them, they need to be convinced to do so. To make it fair, you need to provide value by giving them something they want or need in exchange for their data. This is known as “Lead Magnet”.
What makes a good lead magnet is that they are specific, convenient, and easy to follow whilst placing you as the only option to solve a particular problem or satisfy a unique need.
With many different ways to generate a conversion, it is important to have the buyer persona defined to take advantage of the lead magnet’s full potential. Here are some examples you can use to add value to the exchange of information.
Value by Knowledge
- Case Study
Value by Entertainment
Value by Product
Value by Use
Classifying Leads: Marketing and sales, assemble!
So your visitors have left their contact information. This means they are interested in learning more about what you can offer them and how to solve their needs. They’ve become a lead, now what?
In Marketing there are many different types of leads. It is important to know them all to understand how close they are to make a purchase and have either the marketing team or the sales team nudge them in the right direction. Classifying your leads will help you save time on someone that isn’t worth pursuing and most importantly, not letting a promising lead getaway.
Did you know that leads are 9x more likely to convert when businesses follow up within 5 minutes?*
These are the different levels a lead can be in. Each one can be classified based on its interest and likeliness to make a purchase.
- Cold leads: Someone who isn’t aware of your brand or a prospect that hasn’t expressed interest in you. At this stage, it is up to the marketing team to take the cold leads further the sales funnel with engaging and appealing content.
- Warm leads: A person who is aware of your company and has taken interest in your offering. It is likely they haven’t figured out exactly what they are looking for and are not interested in making a purchase just yet. Again, the marketing team needs to figure out how to convince the lead to move it to the last stages of the funnel.
- Qualified leads: They meet key points of your business persona description and are aware of what you do. They’re closer to a buying stage and they’ve taken action in learning more about your brand. Qualified leads can be divided into two categories:
- Marketing-qualified leads (MQL): Someone who is engaging with your content but hasn’t made a buying decision. These leads require nurturing and more focused efforts.
- Sales-qualified leads (SQL): People who have expressed clear purchase intentions and are ready to be handled by the sales team.
Now that the foundation of a Lead Generation strategy has been covered, it is time to take a look at some of the main pain points businesses can solve with a well-thought-out strategy.
85% of B2B marketers say lead generation is their most important content marketing goal (Ring Lead, 2017).
Generating Leads: A Solution for many problems
Whether your sales team is working with cold leads that go nowhere or you are looking to increase good customer relationships, Lead Generation strategies can help you get the results you want.
Here are some of the problems you can effectively tackle with a good plan of action:
I need to raise brand awareness for my businesses.
If you’re just starting out in the digital world, a lead generation strategy can increase brand awareness and roll in the dough. But keep in mind, performance depends on defining your buyer persona, choosing the right lead magnet, and accurately classifying your leads. It is important to deliver quality content that solves pain points and nurtures relationships if you want to see good results.
My sales team is not closing enough sales.
If the sales team is struggling to convert incoming leads, a Lead Generation strategy could do just the trick. 96% of people visiting a website are not ready to buy yet, but with good planning, you will be able to classify the probability each lead has of making a purchase. Remember, focus your selling efforts on those who need it the most. Forrester, a research company, found out that leads respond positively to vendor contact when they are at the last stages of the sales funnel.
I’m wasting a lot of money on marketing strategies that go nowhere.
With tangible results, lead generation strategies can solidify a marketing team’s role within the company. But most importantly, it will give you the information to develop accurate strategies that will obtain a higher return of investment as there is already an understanding of who the customers are and what they expect to hear from you.
Benefits of Lead Generation
Lead generation is important for every business regardless of size, industry, capabilities, or market share. Without it, your business will hit multiple brick walls trying to sell and expand.
Remember, lead generation is the cornerstone of other data-driven marketing efforts such as content, branding, customer-focused experiences, and much more. Without the information, your business will struggle to generate leads as you’ll be unsure how to attract people and what it is they are looking for.
Knowing your audience will grant you the power to make better business decisions and avoid losing money in solutions that will take you nowhere.
Why is lead generation important for business?
Lead generation enables your sales pipeline to work as one. It will focus all selling efforts on qualified leads that are ready to make a purchase. While granting the marketing team the visibility they need to create more accurate and engaging campaigns to generate even more qualified leads the sales team can work with.
Even though digital tools have taken over, cold prospecting is not going anywhere. But, the results that take a lot of time, effort, and money can be achieved faster, more accurately, and without hurting your bottom line with a lead generation strategy. Think of it as a road map for your marketing and sales team. With it, they can make their way around a heavily competitive market and reach the customer through relevant content that builds a long-lasting relationship.
It is important to understand that buying habits have changed. Customers are in control now and they like to make smart decisions on their purchases. It is vital for big companies and small businesses to find new creative ways to cut through the noise to reach out to potential clients with very specific interests and needs.
At Bexi, we are all about accelerating your company’s success with a full suite of strategic, data-driven marketing solutions. If your business is not achieving, we can help you set up a Lead Generation strategy for one-third of the cost of a traditional marketing agency.
We offer more flexibility, which enables you to budget and control your marketing capabilities as your priorities change over time.