What is Lead Generation? The Ultimate Guide
Updated: Oct 29, 2018
Leads. No, not the kind you use to take dogs on walks with. The other kind. ‘Leads’ and ‘lead generation’ are terms that get thrown around by marketers and salespeople, even though they can refer to many different things.
Well, we say no more confusion, and definitely no more jargon. We’re going to get to the nitty-gritty of exactly what lead generation is, how it works, what constitutes a good lead, the difficulties surrounding lead generation and how to address them. Right then. Walkies.
What is a lead?In the context of marketing and sales, a lead is a prospective customer for a business. A lead shouldn’t be confused with someone that fits into a business's target market, as it is so much more than that. A lead suggests that communication has been opened with the person and you have a way in to reach them. They have usually indicated interest in what your business provides, perhaps by filling out their details via an online form.
There are two main types of leads - inbound and outbound. The difference depends on where you meet them. Inbound leads are people that have come knocking on your door. There are all sorts of things you can do to improve your chances, such as being well represented on social media, or by having a great business website.
Outbound leads are trickier. They are ones you have gone out of your way to find, meaning that you end up approaching people who just don’t want to listen. While there are steps you can take to increase the number of inbound leads you receive, it is outbound leads that require the most effort to find, usually through lead generation efforts.
What is lead generation?
Lead generation means getting someone who you identify as a potential lead to transition from curious visitor to engaged and interested, then on to a sales prospect and finally a converted customer.
Put simply, lead generation is any tactic you use to attract customers, or ‘leads’ to your business, with the aim of converting them into a sale. So things like putting up a poster, writing posts for social media or putting a referral offer in place all count as lead generation. Someone that sees your poster and comes into your shop thus counts as a lead you’ve generated.
Businesses no longer need to solely rely on traditional-media methods to find customers. Digital media has opened up a range of possibilities so that you can find customers online. So now, when we say to ‘lead generation’, this can refer to paid ads on search (Google Ads) and social media (e.g. Facebook ads).
All lead generation methods are completely valid. However, they all have varying levels of success. Different methods will work for different companies - it’s all about working out the way to get the most high-quality customers for the lowest possible cost.
Why is lead generation important?
Business isn’t as simple as it used to be. Say you own a local Butchers. Twenty years ago, your Butcher’s shop would be on the main road. People would see your shop, have a look through the window at your pork loins and decide to go inside. They’d buy some sausages, and hey presto! A sale.
That’s not how things work anymore. There is a greater need for businesses to be online, even smaller local businesses. Think about it. If you needed a butcher you’d probably google which one was closest to your house, and scan a few reviews while you’re at it.
Your customers are everywhere. They are on Google, on social media, watching youtube, reading online articles, listening to podcasts. The good news is, at a price, you can reach them at any of these places. The key is working out the most cost and time effective methods to get yourself in front of the highest quality customers on the platforms they already use.
People exist on multiple channels all at once, so your efforts should reflect this. You should aim to have a presence on every place your customers might be. Great lead generation looks like multiple channels working together to get your customers.
What lead generation isn’t…
“I’m not buying a list of names just to cold call wrong numbers and uninterested people!”
Yes, this used to be the case. Lead generation has a bad rep. Thankfully, like fax machines, horse-drawn carriages and blockbuster, things have become a lot more advanced.
Then: a list of phone numbers of people within a general age range or location.
Now? You could know the phone number of someone who googled your industry mere seconds before.
Thank goodness for digital channels! You no longer have to call up people to educate them about your products or services. Buyers can easily research on Google, watch demos Youtube, search Instagram for the latest trends...they know what they want.
This provides a new issue though - how do you reach them across these many channels and persuade them to go with your company? And how do you optimise towards each method? Not all leads are created equal
Leads come in all shapes and sizes. Some are extremely high quality: think returning customers who have made high-value purchases previously and believe in your brand. Others are lower quality: like someone who has never heard of your business and doesn’t particularly want your product. In fact, why are you calling them? Stop calling them. You have better things to do. So you should focus on high-quality leads, or at the very least, efforts to produce them. But what makes a lead great? If you’re choosing between lead generation services, here’s what you should look for to ensure high lead quality.
1. Exclusive At the point of generation, the lead’s details have only been sent to you. Some lead generation companies may offer a lower price for non-exclusive leads. But beware! Unless you are super slick with your sales process, the chance of actually converting these are slim. 2. Immediate
Fresh. Hot. Leads as satisfying as bread fresh out of the oven. And like bread, the longer you leave it the worse it gets. While a lot of this is about your own speediness when calling new customers, how they actually get generated also matters. The best lead generation companies use automation and plug leads into your CRM to give you the best chance.
3. Worth It
Return on investment is what counts. There’s no point in receiving leads if they are expensive to generate, difficult to scale or impossible to convert. You should be able to work out your exact cost per conversion and make a great profit on your leads.
These three elements add up to quality - perfectly positioned leads to convert into paying customers.
Lead generation is on the up.
But don’t take our word for it. We would say that. Content Marketing Institute found that 85% of B2B marketers say lead generation is their most important content marketing goal. It’s no longer good enough to write a nice blog post to sit pretty on your site. Everything you do needs to have a purpose, and a clearly defined goal.
Doing your own lead generation is difficult.63% of marketers say generating traffic and leads is their top challenge.
80% of marketers say their lead generation efforts are only slightly or somewhat effective.
61% of B2B markets state lacking resources such as staff, funding, and time remains the biggest obstacle to successful lead generation efforts.
This is the issue. It’s all well and good to know you should be getting better at lead generation, but putting advice into practice is challenging.
So how do you get the most out of lead generation? 1. Target smart
Here at Go To Digital, we love data. It underpins everything we do. When we say target smart, that applies to everything. From what lead generation channels you put the most budget into, to working out exactly what wording works best for your ads. 2. Get slick with your sales process Sales is the Ying to lead generations Yang, the peanut butter to it’s jelly, the Donald Trump to irresponsible tweeting. They go hand in hand, and one doesn’t work as well without the other. It’s great to invest energy into both, so that once your leads are coming in you are well equipped to handle them.
3) The multi-channel approach
Your customers exist all over the place, so meet them where they are. Even if this means spreading out your strategy and using different sources. For example, using a lead generation company to supplement your own efforts.