What is lead generation?

Lead generation is the first stage of approval that customers have for your brand; it’s a start of a business relationship between a business and it’s likely customers.

In sales and marketing lingo, lead generation is a strategy to get your prospects to give you their details like phone number, email, name, profession, company’s name, and location. Marketers generate leads in order to get more people to notice their brand, subscribe to their services, and/or buy their products. For example, a company might want to generate leads merely for increasing their newsletter subscription while another business might want to generate qualified leads so that they can pitch their products.

HIstorically, lead generation used to be a much simple strategy. You went to a store and were greeted by a salesperson who would give you a form to fill out. You would happily oblige without thinking much and jot down your name, phone number, and other pertinent details. The store would then use that information to call you up or email you occasionally to market you the arrival of the latest products. They might even send you a tantalizing discount code or send a buy-one-get-one offer for your next purchase.

While the philosophy and goal of lead generation are largely still the same, it has become a highly competitive and challenging practice in today’s digital world. For a start, customers today are more selective in sharing their personal details with businesses because of the growing concerns around privacy and personal data. There has also been an exponential growth in the number of businesses vying to get a customer’s attention at the same time, which means only a few businesses can bag the customer information in their lead generation bucket.

These obstacles have complicated the way businesses gather lead data for their business, but they have also added more importance to the topic of lead generation which is why it’s one of the most heavily invested upon, much talked about ideas in marketing and sales circle.

Why is lead generation so important?

Lead generation is primarily important mostly for the same reasons it is important to identify the right market for your products. You can’t sell your products you don’t have any leads to go after. Lead generation is important because it helps to connect with people who are likely to buy your products. If you don’t have a lead generation strategy for your business, you are treating your business and its product like a buffet party that is subject to the whim of nameless strangers you don’t have control over.

Image what can happen if you can shake hands with each of these visitors, get to know them by their names, exchange phone numbers, and communicate the value of the meal on a personal level. That would be a much more fulfilling experience for both—your business and your customers.

But the seriousness of lead generation is not just narrowed to the scope of curating a list of potential buyers. Lead generation is also critical because it adds new customers to your buyers’ list, helps you to know your customers better, encourages them to start a relationship with your business, enables you to understand your ideal market, and helps you plan necessary business activities to boost sales.

How does lead generation work?

Lead generation can be either outbound or inbound. When your business does outbound marketing, such as placing advertisements at places for your would-be buyers to notice and sign-up, you are essentially designing an outbound lead generation strategy. Many businesses also buy lead lists in order to make cold calls and pitch their prospects via emails. It’s a more proactive marketing avenue that can be costlier and might not justify your ROI.

On the other hand, inbound marketing activities such as creating blogs with sign-up call-to-actions and giving free e-books to your readers in exchange of their email addresses are examples of inbound lead generation strategy. Instead of pushing your business agenda to your target market, inbound lead generation strategy helps you to “pull” prospects into your business and engage them. Inbound is a simpler, more affordable, and efficient way to generate leads. It is also more encompassing in its scope than outbound because it helps you with branding, building customer relationships, and creating a lasting impact on the world.

In essence, both inbound and outbound lead generation channels aim to serve the same purpose, i.e., to give you more numbers of prospects that you can convert into customers. It gives you a starting point for your business to facilitate the first stage of a customer’s journey.

How to generate and qualify leads

As much as lead generation is hyped up about as a gold standard for driving sales in marketing and sales circles, its success mostly depends on how good the lead quality is and not how many leads can you generate at a given time period. Therefore, harnessing the power of your inbound marketing activities become even more important because you have more control to attract the right people into your business.

Relatively speaking, outbound is more of a “spray and pray” strategy where you target your marketing efforts to a wider base of audience hoping to attract the right ones. But inbound marketing is more precise in its targeting because it’s an intuitive pull strategy that filters the unfit audience out of the funnel as it progresses towards conversion.

Let’s take content assets for example. Ideally, your inbound marketing team comes up with blog and webinar topics based on what your target audience wants to read or listen to. If the topic is interesting enough, they will sign-up with you. Meanwhile, the unfit audience will not waste their time signing up for something that doesn’t add value to their lives—it’s a win-win for everyone!

Another great way to generate quality leads is by adopting a lead scoring mechanism in your marketing and sales cycle. Lead scoring helps your business identify hot, warm, and cold leads so that you can go after prospects that are most likely to become your customers based on their engagement with your brand. A good CRM tool offers a lead scoring feature in its product for you to gauge a prospects’ interest and launch relevant activities to leverage their buying probability.

Here’s how Freshsales, a sister product of Freshchat, helps you categorize your leads based on a lead scoring scale:

lead scoring and qualification

Applying the lead scoring technique to your lead generation process can help you further in identifying marketing qualified leads (MQLs) from sales qualified leads (SQLs)—two coveted sets of data that sales teams can use to increase conversions. While not all MQLs are likely to become customers, SQLs have a high probability to become your customers.

Lead scoring breaks down your lead demography by the level of interest in your brand so that you can launch effective plans for each group in order to establish a meaningful relationship. Here are four tactical ways you can use to generate and qualify leads for your business:
 

1. Double down on SEO

A great inbound marketing begins when your brand’s content starts ranking at the top of Google search results. Therefore, it’s worthwhile to identify the most-sought-after keywords that your prospects are searching for and investing in SEO marketing to attract people to your brand. Get your marketing team to use SEO-friendly tools to identify high keyword volume relevant to your niche and create a stash of content that captures your audience’s search intent. This will make your marketing and lead generation a cohesive and a thought-out strategy. Instead of betting on generic methods like advertising and cold calls/emails, going after long-tail SEO keywords keeps your content in the line of sight of your right audience for a longer period of time than other lead generation strategies that are mostly short-lived.
 

2. Create friendly call-to-actions

Call-to-actions (CTAs) are interactive buttons, rhetoric marketing copies, or persuasive ads that encourage people seeing your ads to click on them and share their information. CTAs are done-to-death in the marketing world, which is why you have to be very judicious on how your phrase and place them. For example, if you are considering deploying a pop-up on your blog page for customers to subscribe, don’t overdo it and make the message annoying. It’s worthwhile to keep the pop-up subtle and friendly for people to notice on their own. You can place a hello bar at the top of each blog and color it well for people to enter their email. Or, you can find other non-invasive ways to get people to sign-up, such as by having a pop-up timed after three minutes of a user engagement with a page. This way, the pop-up doesn’t interfere with their initial interest but catches them towards the end of their journey before they slip away.

3. Use a modern live chat tool

Live chat is mostly an inbound lead generation channel, but you can use it to proactively engage with your potential leads. Live chat can be a very good substitute to replace your annoying pop-ups and squeeze pages that irk most of the customers. Live chat can be small yet noticeable, human or automated, and support-based or self-discoverable.

For instance, say you don’t have the bandwidth to set up a live chat team that can take customer questions 24/7. This is a common problem for many growing businesses universally, but live chat can help you overcome it by letting them communicate the business hours to their website visitors upfront through a feature that allows you to prominently display your hours of operations. Additionally, you can deploy chatbots to fill in and engage with leads outside of your core business hours. The chatbots can collect lead data, automate the data to your CRM, and offer basic help.

Here is an example:

freshchat chatbot
4. Incentivize your lead generation

To make your CTAs more appealing to customers, provide value to people in the pre-lead stage. Don’t just create marketing copies with tall promises on how their association with your brand will help them succeed in their goals, but actually offer service that they will appreciate you for and remember. This has multifold advantages—marketing, lead generation, branding, and building relationships with customers who will admire your generosity. Offer them registration invites to your webinars or ebooks to download in exchange for their emails and phone numbers, even if it means no immediate financial ROI. Give them event tickets to your global conference or offer discounts and free trials. The right kind of people will happily trade in their lead information for the value that they will see in these offerings.

Important lead generation benchmarks

 

Lead generation is purely a metric-driven concept and there are many benchmarks that you should be aware of in order to attain your goals or improve your lead generation tactics. Here are a few most important lead generation benchmarks you should be aware of, and aim to achieve, whenever you run a lead generation campaign.
 

Cost per lead

Just like how traditional advertising uses cost per impression (CPI/CPM) to denote the price of an ad for every new 1000 views, cost per lead (CPL) is a formula to measure the worth of every lead that converts through your lead generation campaigns. The formula to calculate the cost per lead is:

cost per lead formula

For example, if you run a pay-per-click ad campaign for a budget of $2000 and end up acquiring 40 leads, your CPL will be calculated to $50. The lower your CPL, the more effective your ad campaign is—although the value on CPL varies from industry to industry or even from brand to brand. In essence, CPL measures the effectiveness of your lead generation campaign by measuring the return on investment.
 

Website traffic

The measurement of the traffic into your website is also the measurement of the effectiveness of the ad campaigns you run. For instance, if you launch a new ad to give away free ebooks to people who sign-up with your blogs, you will most likely see a spike on your blog traffic in the next month. In plain terms, more footfalls into your virtual store means more chances of selling. You can use tools like Google Analytics to measure website traffic or make new adjustments in your website to attract more leads. Increased website traffic also gives you a direct, but long-term, leg up in ranking better in the search result pages because the search engines automatically deem your website to be more in demand and authentic over time because of the high traffic volume.
 

Funnel benchmark

Funnel benchmarks encompass a wide range of metrics starting from visitors to leads, MQLs, SQLs, opportunity to customer, etc. Visitors are top of the funnel assets that have the potential to filter in as marketing qualified leads and sales qualified leads. Similarly, MQLs are warm leads in the middle of the funnel that can potentially turn into customers if nurtured well. Sales qualified leads are bottom of the funnel customers who have the high probability of buying your products and services with a little timely nudge. When all funnel benchmarks align well in a cohesive sequence, your lead generation will naturally become more seamless and accurate.
 

Email click-to-open rate

Email click-through and open rates are one of the most mystical metrics to chase and achieve, but there are plenty of tools today that can help do measure them. Although email click-to-open rate is mostly geared for cold emails and email marketing, it’s a useful metric to track even for the sales and nurturing activities you launch after capturing a lead data through live chat. The click-to-open rate, also known as CTOR, measures the number of unique clicks and opens to understand how effective your email message was. This helps you to gauge the level of interest in people who click open your email message versus those who don’t and adjust your prospecting accordingly.

Lead generation best practices

There are who is in the market for doing lead generation in some shape or form, but not all lead generation strategies are well thought-out. Most of the lead generation happening out there is carried out in a haste, spammy, and inefficient manner. If you don’t carry out lead generation in a mindful manner, you will end up getting false leads and waste your valuable time and money.

Below are a few lead generation best practices that can help you create an authentic and effective lead gen strategy.
 

1. Create a smooth leads funnel

Don’t create silos in your brand experience by creating content that doesn’t reflect your brand at the purchase level. It all has to be an integrated effort—customers should have this uniform experience across your brand touchpoints no matter where or how they are interacting with your brand. Here is an example of how your lead funnel should look like from end-to-end:

lead funnel

If you can make your lead strategy to follow this funnel, you will be able to create a gold standard of lead funnel that is seamless, process-driven, and efficient.
 

2. Create different content for different stages of leads

Content consumption is horses for the courses, it is a subjective and highly contextual journey. What a lead has read yesterday might not be relevant to them in their next buying journey because now their awareness level is heightened. Therefore, you have to offer a different level of content experience to your leads who are there at different stages. For example, a blog about the what and how in your niche would be the top of the funnel content that new leads might appreciate. A live webinar with a known expert in the field would attract middle of the funnel leads, while a free trial sign-up can be a bottom of the funnel content.
 

3. Personalize content experience

In the recent years, lead generation has become a number chasing game for many marketing and sales teams. A marketing team might acquire a huge number of leads through their campaigns, but when it comes to sales, the conversions peter out because your product was never relevant to these leads. This is a gap that personalization can solve. The right people will be drawn to your business if you reach out to them on a personal level and this is one thing live chat really excels at. Live chat has the technology to pull out a prospect’s data and allow chat agents to talk to new users and returning visitors alike in a personal manner.
 

4. Retarget prospects with ads

Brand recall is a powerful force and retargeting ads are very good at bringing back leads who might have leaked through your funnel previously. Retargeting is a strategy for your business to go after leads who once visited your website pages, but somehow lost interest and navigated to other parts of the internet. You can use cookie-based retargeting to show these leads value in your product and services and coax them to give your brand a second try. It’s a worthy pursuit to court your leads even after they fall through the cracks because sometimes you have to remind and reiterate your brand value to your potential buyers.
 

5. Don’t overdo it

The best idea to keep your lead generation strategy healthy is to practice everything in moderation. You can have all the great lead generation tactics in place and yet, you might fail because of how annoying it comes across to your prospects. Take for example a website that has a push notification opt-in box, a pop-up message while you were trying to glean an important piece of information, a newsletter opt-in dialog box, a cookie consent form you have to agree to, and an exit intent pop-up that blocks your entire view when you hover your mouse outside of the page. That’s just too many layers of marketing for customers to battle and they will just find it easier to close the tab and go somewhere else less salesy and more peaceful.

How to leverage live chat for lead generation

Live chat has an upper hand in generating leads when compared to other channels, i.e., perfect timing. While other lead generation channels function at different stages of a customer journey, live chat kicks in when customers are at the peak of their engagement with your brand. They are in your website, interested in knowing more about your product based on their past reference, considering your product for purchase, and all they need is a little bit of positive affirmation to go through the buying cycle. You literally get to convert them into leads in the real-time.

Compare this with cold calls or emails that are proven to be time suck endeavors because customers will find excuses to skirt around them. This is the very reason why many companies, including SaaS-based businesses, are already seeing live chat as the biggest source of lead generation as against other traditional means.

Below, let’s take a look at some of the best ways to leverage live chat for lead generation:

1. Chatbots

Use chatbots to handle menial tasks in an interesting way. Suppose a prospect comes to your website and you want to engage with her; you can deploy a chatbot to engage with her in a personable way in order to measure her interest level, collect contact information, and qualify them as possible leads. Chatbots can also replace human agents in their absence, such as during offline business hours.

2. Contextual communication

Use live chat to trigger timed messages based on user behavior on your website. For example, if a user navigates to the features page, you can make a triggered message appear at the right time to offer a one-on-one demo. You can also trigger messages based on events such as when a user drops items from her shopping cart.

3. Multi-tasking

Unlike phone and email channels of lead generation, live chat allows you to talk to multiple prospects at the same time without compromising on the quality of the communication. You can make use of automated features like bots during the pre-chat stage or send canned responses to respond faster.

4. User-friendliness

Website visitors are intimidated by the long pre-chat forms that they have to fill on some websites in order to talk to a human agent. While this kind of gating philosophy is true also for live chat, users find giving their information to a bot easier and intuitive. Live chat comes with a user interface that is familiar and convenient.

Freshchat helps you generate more leads for your business

Freshchat is not just another live chat software—it’s a thoughtfully-built lead generation tool for the marketing and sales teams to engage with prospects in a human and personal level. Take a look at some of the features that Freshchat offers to help you generate more leads:
 

1. Work smart with IntelliAssign

Use Freshchat’s IntelliAssign to evenly distribute or route incoming chat conversations to individuals or groups in your team. This helps your team in two ways: 1) you can streamline the chat volume evenly across a team, and 2) you can map specific chats to experts qualified to handle certain conversations.
 

2. Leverage chatbots

Program Freshchat chatbots to be friendly, goofy, or sassy—any way you want to make them more likable to your target audience. Give them a personality that your prospects would love to interact with and create simple bot workflows to collect and automate lead data to a CRM.
 

3. Reduce bounce rates

Use campaigns and trigger contextual messages to website visitors before they drop-off from your website. Set-up Freshchat to show timely and event-based messages that capture your audience’s attention at the right time and make them stay back.
 

4. Get deeper user context with SmartPlugs

Push or pull data from third-party applications using SmartPlugs. For example, use SmartPlugs to view a social handle of a website visitor to understand their preferences and carry out contextual communication to recommend better and sell smarter.
 

5. Unleash the power of self-service

Many prospects don’t necessarily need to talk to a chatbot or a live chat agent to convert as a lead. All they need is enough information they can discover on their own. Neatly organize your Knowledge Base, FAQs, and other self-service content within Freshchat widget for easy access.
 

6. Integrate with your favorite tools

Integrate Freshchat with other software such as Freshdesk, Slack, Clearbit, Zendesk, and Facebook Messenger. Multiply the power of Freshchat by connecting it with other tools that are important for your sales function.