A detailed look at lead generation

Big business or small, B2B or B2C, every business depends on leads. If you’re a salesperson, you’re always on the lookout for more leads. If you’re a marketer, you’re discovering new ways to generate them. Generating leads is not easy, but it’s not rocket science either. In this page, take a deep dive into every aspect of lead generation:

 
WHAT IS LEAD GENERATION?

Lead generation is the process of finding people (leads) who’re likely to become your customers immediately or in the future. “Finding” people implies finding information about people, like their name, email ID or organization’s name, all of which you can use to initiate a business relationship with them. You can generate leads organically and/or by spending money, depending on your resources.

If you meet fifty people at a conference, request them for their email ID, and they share it with you, that’s an example of lead generation.

If a visitor to your website fills out your signup form, that’s lead generation too.

Or let’s say you’ve posted about your product/service on social media. A visitor leaves a comment, expressing interest in your business. This is also lead generation.

These examples might make it seem like lead generation is pretty easy; it is not. To get people to divulge information about themselves, you should be able to articulate the value in your business solution. Plus you need to be present in channels that get you closest to your target audience. Articulating value is a broad, multi-layered topic, and it has as much to do with soft skills as it has to do with your knowledge of the business. However, there are specific channels you can tap into when it comes to lead generation, and that’s where we’re heading next.

Channels of lead generation

Broadly speaking, there are two channels of lead generation: inbound and outbound.

Both channels are obviously aimed at generating leads for your business. But there’s a slender difference in the way they work.

The outbound method involves a proactive attempt to reach out to your audience. This usually begins with purchasing lead lists. You then contact these leads by calling them directly (cold calling) or sending them physical mails (direct mail). For a wider reach, businesses look beyond lead lists and use billboards, print ads, television ads, and radio ads. The emphasis here is on budget, media connections, and how much marketing muscle you can flex.

In outbound lead generation, your pitch is quite apparent and there are no efforts made to educate your audience.

The inbound method attracts leads using online content. You create a website, or you write a blog, and you optimize it for online search through SEO (search engine optimization) techniques. This means the content has the appropriate keywords and answers the questions your target audience is asking. When your content is easily discoverable and begins to engage your readers, they become your leads. Depending on how you interact with them from then on, they can become your customers too.

In inbound lead generation, you educate your target audience through a carefully planned content strategy. This takes time and involves very little budget spend. Two keywords here: content and SEO (search engine optimization). And the domain is largely digital.

Outbound vs. Inbound
Outbound lead generation
  • Interrupts leads
  • Communication is one-way
  • Primary motive is to sell; the marketing intent is explicit
  • Budget is king
  • The business decides when and how to engage with the audience
  • Channels of engagement include cold calls, direct mails, print media, billboards and conferences
  • Generic and targeted at the masses
Inbound lead generation
  • Attracts leads
  • Communication is two-way
  • Primary motive is to educate; the marketing intent is subtle
  • Content is king
  • The audience decides when and how to engage with the business
  • Efforts are concentrated around the digital domain; content extends across text, images, video and audio
  • Personalized for specific audience segments/demographics

B2B lead generation: Classifying your leads

In B2B, inbound is the preferred channel of lead generation. The whole process of drawing a lead into doing business with you—by educating first and selling later—matches the B2B business model, where businesses don’t make impulsive purchase decisions. Which is why inbound marketing in B2B takes leads through three levels of the sales funnel: ToFu (top of the funnel), MoFu (middle of the funnel), and Bofu (bottom of the funnel).

ToFu: Leads at the top of the funnel need awareness. They know nothing about what you offer and what domain you operate in, so you’ll need to create a conversation around both these focus points—without selling your product up front. If you sell CRMs, you attract ToFu leads by talking about how SDRs (sales development representatives) can do their job better using CRM software. Blogs, ebooks and guides are content types that work well at this stage.

MoFu: Leads in the middle of the funnel need nudging. They’re not completely clueless about what you do, but they’re not ready to buy either. They have many questions about your business, and they’re also starting to compare you with the competition. Be prepared to share content like case studies, testimonials and videos that continue to educate and yet make a strong case for your brand.

BoFu: Leads at the bottom of the funnel need your product/service. They’re past the education stage, they know exactly what you can give them, and now you’re making a clear pitch. This is the right time to offer a trial, demo, or a discount and bring them into your business. The leads that get to this stage are way fewer than those who step into the funnel, so make sure you offer maximum value here.

Lead management

6 ways to generate sales leads online

Content marketing

Create and distribute content with a primary focus on education, not selling. Content can be produced in various formats—blogs, infographics, videos, case studies, white papers.

Social media

Depending on your business, every social media platform can be a precious lead generation channel. Facebook, Twitter, Instagram and Snapchat are essential for B2C; LinkedIn is elementary for B2B.

Email

With email, you get to initiate a one-to-one conversation with your recipient, while sharing a blog, inviting them for a webinar, informing them about a product update, or offering a discount.

Webinars

Webinars require people to share their email ID, which makes it an ideal lead gen activity. Timely webinars, with relevant topics and quality speakers, can build a brand around your business.

PPC (pay-per-click) ads

Clicking on a PPC ad takes the visitor to a landing page, which collects the lead’s information. PPC ads work because they contain keywords relevant to your audience, plus they appear on page one of Google.

Display ads

Also called banner ads, display ads are like print ads for digital. Crisp copy, a persuasive CTA (call-to-action), illustrations and animation are effective elements in display ads.

Key lead gen metrics

When you’re generating leads, you measure your efforts and results based on a set of metrics. These metrics are applicable to both B2B and B2C (business-to-consumer).

Here’s a list of 6 metrics that are fundamental to your lead gen activities:

Website visits

This is the number of visits to your website from unique URLs, not including your own employees. A higher number of website visits means more people are landing on your site. This traffic is acknowledged by Google (and other search engines) as an indication of your website’s authority. As a result, your website starts ranking higher for keywords you’re targeting. One way of getting more visitors to your website is by promoting it extensively on social media.

Source of visit / Lead source

In Google Analytics, lead source is classified based on the following default channels:

  • Direct: lead types your URL into the address bar, or clicks on a bookmark of your site
  • Organic: lead finds you from organic search results
  • Social: lead arrives on your website from social networks
  • Email: lead follows a link to your website from email
  • Affiliates: lead comes from an affiliate marketer’s website
  • Referral: lead is “referred” i.e. they come to your website from a link they find in another website
  • Paid search: lead finds you from PPC (pay-per-click) ads in search results
  • Other: lead comes from online advertising apart from search and display, like cost-per-view video ads
  • Display: lead finds you from display ads
MQL (Marketing Qualified Lead)

An MQL is one step higher than a lead, in terms of the level of engagement with your business. An MQL typically performs an activity, like downloading your ebook, which is a clear indication of their interest in your business. Sometimes an MQL can also be determined based on their demographic profile. MQLs are ready to be nurtured, but they’re not ready to buy just yet. They’re usually handed over by the marketing team to the sales team.

SQL (Sales Qualified Lead)

When an MQL displays sales-ready behavior, like requesting for a demo or signing up for a free trial, they become a sales qualified lead. These leads are usually handed over by the sales team to an Account Executive (AE). SQLs are close to making a purchasing decision, so the quicker the AE acts, the higher their chances of conversion. A good way to identify an SQL is by applying the BANT framework—do they have the Budget, Authority, Need and Timeframe to buy from you?

CTR (Click-through rate)

CTR is the number of clicks on your CTA button, versus the total visitors to that landing page or ad. If 1000 people visit your landing page/view your ad, and 650 people click on the CTA, your CTR is 65%. A high CTR depends on a number of factors, chief among which are the value proposition on your page/ad, your CTA’s placement, and the relevance of your content vis-à-vis your target audience.

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ROI (Return on Investment)

ROI is probably the most important metric in lead generation. The calculation is fairly simple: it’s the profit or loss you make from investing in a lead, compared against your initial investment. Let’s say you spent $15 capturing each lead, and a lead is worth $20 to you. Your profit from a lead ($5) against your initial investment ($15) gives you an ROI of 33%.

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Lead management

One of the hardest things about lead generation is determining the relevance of a lead. A website visitor who completes your signup form could be a competitor, trying to test your product. Technically they’re a lead, but you’re not going to be doing business with them. So how do you separate the wheat from the chaff? Enter lead management.

Lead management is a combination of several things. First you need the right tool to store your leads. There’s no point generating a torrent of leads if you can’t view them all, with context, in one place. And then you need to nurture every lead before they can be convinced about doing business with you. Finally, you’ve got to be able to rank your leads—based on how much (or how little) they engage with your business—so you can reach out to the hottest leads first.

Presenting three crucial elements of lead management:

CRM software

Over the years, businesses have used many tools for lead management, like the rolodex, contact management software and spreadsheets. But these tools function like a system of record. Sales reps just view their leads using these tools; they don’t get context. And that’s where CRM software (customer relationship management software) fills the void. In a CRM, every lead gets their own profile. This profile contains demographic details, a chronological list of every conversation the lead has had with your business, along with all the data/documents you’ve ever shared with them. And all this is just one part of what CRM software can do.

More about CRM software
A lead's profile in a CRM like Freshsales

A lead's profile in a CRM like Freshsales

Nurturing a lead

Nurturing a lead involves careful and consistent communication with the lead, as you try and convert them into your customer. If you’re in SaaS, the problem statement could look like this: somebody just signed up for my product, so 30 days from now, how do I get them to sign on the dotted line? You use a tool like email. Well-compiled emails, sent at regular (but unobtrusive) intervals, have a very good chance of gaining your reader’s mindshare and making them invested in your product. With each interaction, you take a step towards bringing the lead closer to your business.

Qualifying a lead

Imagine you have 125 leads. Every lead has engaged with your business in unique ways, and they’re in different stages of your sales funnel. It’s not humanly possible to glance at a lead and recall how closer/farther they are to your business—until you use lead scoring technology. Lead scoring is a method by which you define parameters to qualify or “score” a lead in the CRM. So a CTO might get 15 points by virtue of their designation, and a lead who clicked on a link in your email might get 10 points (versus a lead who only opened your email and gets 5 points). All these points add up, and the higher the score, the hotter the lead. Putting a score on a lead cuts down your decision-making time in terms of which lead you should contact first.

More about lead scoring
How lead scoring looks like in a lead's profile

How lead scoring looks like in a lead's profile

So you’ve worked hard, created a great lead generation strategy, and gotten a ton of leads. What next?

Convert your leads. With some professional assistance.

When you sign up for Freshsales CRM, you start with a free 30-day trial. Take this time to try the built-in phone, score leads, send and track your emails, create reports and automate repetitive actions. Yes, you can do all this from a single sales tool, which is also GDPR-compliant. This means you discover your leads safely, better and faster, and you know exactly who’s closer to becoming your next customer.

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