What Is Lead Generation?
Lead generation is the practice of generating contact information from prospective buyers who are interested in purchasing a business's products or services, with the goal of converting the lead to a sale. But what is a lead?
A lead refers to a person who shows an interest in an organization. Generally, a lead is defined as an email address and company name, but definitions vary by organization. Leads are normally the first step in an organization’s marketing or sales funnel. Leads are usually captured when a person submits their information via an online form, such as a webinar registration, e-newsletter signup, or demo request. Typically someone accepts terms and conditions that allow an organization to collect this submitted information and use it to reach out via email or phone. Leads are valuable for marketing and sales teams because they have been “warmed up” and have at least shown some interest in the company’s services or related marketing materials.
Types of lead generation vary and can be used creatively to target the ideal buyer. Examples can include (but are not limited to) subscriptions to free email newsletters, surveys, or offering exclusive downloadable content in exchange for a completed form.
A lot of times, a lead generation campaign starts with a landing page. This is where leads fill out a form and agrees to terms and conditions. This landing page should have enticing language that convinces the visitor to complete the call-to-action (CTA).
What Role Does Lead Generation Play in Marketing?
Once someone becomes a lead, the focus shifts to moving them down the funnel until they are ready to have a conversation with sales. Marketing funnel stages are unique to each organization, but generally follow a similar format:
- Lead. A lead is a new person for whom you have some insight (generally at least a name and email). For example, a new lead may have submitted their contact information on your website or you may have connected at an event.
- Marketing qualified lead (MQL). It’s common in many B2B organizations to not pass over new leads to sales right away. Instead, marketing will continue to engage with leads until certain criteria are met that shows they are ready for sales outreach. Commonly this is done via lead scoring based on different demographic or behavioral information.
- Sales accepted lead (SAL). After receiving an MQL, sales will evaluate if they qualify for sales outreach. If they do, then sales will generally reach out via an email or phone call to try and schedule a meeting.
- Sales qualified lead (SQL). This is generally the stage used when a salesperson is actively working the lead. These leads are in an active conversation with sales.
- Sales Qualified Opportunity (SQO). When an opportunity is created, sales is signaling that there is an active opportunity for partnership with the qualified lead. They are now in an active buying cycle.
If a lead falls outside of this normal process, there are two holding stages that are generally used:
- Nurture. A lead is moved to nurture when it has been determined that there is not an opportunity right now, but there could be in the future. This stage is used for marketing to continue to nurture these leads until they are ready to speak with sales again
- Unqualified. A lead where there will not be an opportunity with the company in the future. These leads should be removed from marketing and sales efforts.
What Is a Typical Lead Generation Flow?
The sales and marketing funnel is typically divided into three categories: top, middle, and bottom. Top of the funnel indicates awareness activities, or marketing programs that raise awareness of your organization. Middle of the funnel includes consideration activities, or marketing programs that showcase why a buyer needs your solution and how it’s different. Bottom of the funnel, or purchase, is marketing materials that showcase how your features compare with the competition or show what it’s like to use your solution. Lead generation can occur at any of these three stages, but it’s most often concentrated at the top and middle of the funnel.
Some examples of this lead flow include:
- Top: A person learns about your company through digital ads, out of home advertisements, radio ads, on social media, or at a tradeshow.
- Middle: A person completes a form in exchange for content like ebooks, white papers, or webinars.
- Bottom: A person views case studies on your website, compares your features to competitors, or watches a demo video
What Are Some Commonly Used Lead Generation Strategies?
So how can you generate the right types of leads? Here are a few examples:
- Double down on blog posts. Employing SEO friendly blog content can help draw prospects to your website when they’re searching for products and services related to the problems your company solves. Blog posts can serve as an opportunity to establish the company as a thought leader in the industry while also driving traffic to the website.
- Product samples or trials. Offering a product trial to potential customers is another way to generate leads. Allowing customers to take your product for a test drive lets them see first hand how it works and can help inform a purchase decision.
- Referrals. Leverage your existing customers and partners and offer discounts, swag, or other tokens of appreciation in exchange for contacts or introductions to prospects.
Once you have leads in the funnel, there are subsequent strategies you can use to get them ready for a conversation with sales. Some ideas include:
- Email outreach. Reaching out to people who have already agreed to receive communications from you is a great channel to nurture new leads. Be strategic with the frequency of emails, and ensure the content in your emails is helpful, informative, or entertaining. Building trust and establishing your brand as a reputable source for information is critical in nurturing leads and developing prospective customer relationships.
- Host events. Whether virtual or in-person, hosting events with folks who have expressed interest in your products or company category can be a great way to engage with new leads. Try doing a fun activity or brining on a thought leader in the industry to increase attendance.
- Direct mail. Sending a gift or experience to a person in the funnel might entice them to take a conversation with your sales team. Try something creative or unique that also aligns with your brand for the best results.