What is Lead Generation

Guide to Lead Generation

What is it?
Lead generation is the process of creating sales leads which might convert into sale for the company. The leads may come from various sources or activities, for example, digitally via the Internet, through calls, through advertisement and list purchase.

Who uses it?
Lead generation could work for just about any business, but most industries using this type of marketing include insurance agencies, education institutions, office suppliers, and furniture stores. Typical lead generation is predominate where online purchases are not possible.

How is it useful to an organisation?

  • Lead generation is a win-win for both the buyer and seller. A buyer is able to request information from several businesses that offer the product or service that they are looking for and the seller is given the opportunity to pitch their product or service to someone who has given them permission.
  • Conversion rates on leads that you receive often have a higher conversion success rate than cold contacts because the prospect is pre-qualified, before you ever receive the lead.

Limitations

  • If you are running incentivising leads, often people will be happy to give over their details to enter a competition but they may never be interested in your product.
  • Not qualifying leads – most leads are not immediately ready to buy, some leads may never buy, yet so many B2B lead generation companies simply send every lead they generate to their client.
  • Sales representatives call these leads and find they are not ready to buy, and then they call none of the others, some of which would have bought. Lead generation companies should be measured on the number of qualified and sales-ready leads they provide you, not how many leads in total.

Top Tips

  • When you’re about to pay for leads, it is imperative that you have a clear picture of what you’re prepared to pay for – and that you have a clear definition of both the lead and its value in order to brief your agency.
  • Consider how much information you require to make the lead valuable but do not ask for too much information that makes it too difficult for the prospect to be collected.
  • Be careful with incentivising leads – make sure you reduce the value you’re prepared to pay so that you can accommodate for poor conversion rates.
  • Do not try to approach this method of marketing without the ability to follow through and close the sale.
  • You must be quick at dealing with leads, especially where you are buying the same lead as other companies.

Glossary
Incentivising leads – The act of enticing a consumer to complete a form or sign up for a subscription by offering a free gift.
Outbound lead generation – Outbound, or interruption, lead generation, refers to the scenario where you send a message, or messages, directly to your prospects. It is you, not your prospects, that determines the type and timing of each interaction, hence the term interruption.
Inbound lead generation – Inbound is the reverse of outbound. Instead of reaching out to prospects, you lay out a trail of information and incentives (content) that your prospects can follow in towards your company. It is the individual prospect who chooses the type and timing of the interaction.
Lead generation offer – Offered in return for customers providing their contact details and characteristics. Commonly used in B2B marketing where free information such as a report or seminar will be offered.
CTAs (Call to action) – A banner, button, or some type of graphic or text on a website meant to prompt a user to click it and continue down a conversion funnel.

Key websites/blogs
http://blog.adi.do/2013/04/pros-and-cons-of-lead-generation-marketing-online/
http://marketing.about.com/cs/targetmarketing/a/leadgeneration.htm
http://www.hubspot.com/lead-generation-marketing-hub#tab-4