Lead generation

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In marketing, lead generation (/ˈliːd/) is the initiation of consumer interest or enquiry into products or services of a business. Leads can be created for purposes such as list building, e-newsletter list acquisition or for sales leads. The methods for generating leads typically fall under the umbrella of advertising, but may also include non-paid sources such as organic search engine results or referrals from existing customers.^[1]

Leads may come from various sources or activities, for example, digitally via the Internet, through personal referrals, through telephone calls either by the company or telemarketers, through advertisements, and events. A 2015 study found that 89% of respondents cited email as the most-used channel for generating leads, followed by content marketing, search engine, and finally events.^[2] A study from 2014 found that direct traffic, search engines, and web referrals were the three most popular online channels for lead generation, accounting for 93% of leads.^[3]

Lead generation is often paired with lead management to move leads through the purchase funnel. This combination of activities is referred to as pipeline marketing.

A lead is usually allotted to an individual to follow up on.^[4] Once the individual (e.g. salesperson) reviews and qualifies it to have potential business, the lead gets converted to an opportunity for a business. The opportunity then has to undergo multiple sales stages before the deal is won. The evolution of lead generation from newspaper to radio, radio to modern computers, computer to mobiles and social media, which generates the leads for sales in action.

Lead

A lead usually is the contact information and in some cases, demographic information of a customer who is interested in a specific product or service. There are two types of leads in the lead generation market: sales leads and marketing leads.

Sales leads are generated on the basis of demographic criteria such as FICO score (United States), income, age, household income, psychographic, etc. These leads are resold to multiple advertisers. Sales leads are typically followed up through phone calls, emails, or social selling by the sales force. Sales leads are commonly found in the mortgage, SaaS, insurance and finance industries.

Marketing leads are brand-specific leads generated for a unique advertiser offer. In direct contrast to sales leads, marketing leads are sold only once. Because transparency is a necessary requisite for generating marketing leads, marketing lead campaigns can be optimized by mapping leads to their sources.

An investor lead is a type of sales lead. An investor lead is the identity of a person or entity potentially interested in participating in investment and represents the first stage of an investment sales process. Investor leads are considered to have some disposable income that they can use to participate in appropriate investment opportunities in exchange for return on investment in the form of interest, dividend, profit sharing or asset appreciation. Investor lead lists are normally generated through investment surveys, investor newsletter subscriptions or through companies raising capital and selling the database of people who expressed an interest in their opportunity. Investor Lead lists are commonly used by small businesses looking to fund their venture or simply needing expansion capital that was not readily available by banks and traditional lending sources.

Leads can be also of different types based on interest, enrichment and qualification.

Also leads based on qualification is as follows:

1) Hot leads: For those leads, we can apply the technique of BANT :

• B for Budget: The prospect is ready with the budget and is ready for disposal at any time.
• A for Authority: That the lead has the authority to say the final word of "yes" or "no ".
• N for Need: Once the need of the customer is identified, it's the signal to send the lead a signal of a brewing the lead.
• T for Time: The point period of the time you spoke with the prospect.

2) Warm leads: These leads could be nurtured so that only they will become a hot lead. These leads won't get easily discouraged, and if they are nurtured, they can be converted and we will be surprised to see that lead contacted us again if the nurtured was went well.

3) Cold lead: This kind of lead is like a cold soup. That which most of the time is set to be kept in the view and further nurturing is needed. It takes effort , skills and strategies to be able to reach this kind of leads.

Lead scoring

Quantitative way to qualify a lead is known as lead scoring. It is simply means scoring a lead based on the actions they do. The interactions they do in social media with the brand the information they have provided ,or any other criteria. You can give your lead a score or just assign a numerical value .The higher score of a lead is an indication that this lead is interested in your brand or product or service ,whatever you are dealing with. You may tweak the scores along the way until you find a method that works to create a lead. So lead scoring is a way to value each of you leads.

Steps :

• Determine the lead -to -customer conversation rate : This forms your benchmark to covert all your leads to customer.
• Examine different attributes: This step is followed to determine what makes someone more likely to become a customer. This includes location, business size, behavioural data etc.
• Compare the close rate customer rate: It can be compared taking the attributes closer. The higher the close rate ,the more points you can give to the lead.

So you understand, lead scoring is complicated and also its completely based on some inaccurate assumptions. And for marketing tools,they use predictive models.

So predictive lead scoring is a way you can generate leads that can be turned to customers.

Lead qualification status

Business leads are often grouped into segments to the level of qualification present within an organization.

Marketing qualified leads (MQLs) are leads that have typically come through Inbound channels, such as Web Search or content marketing, and have expressed interest in a company's product or service. These leads have yet to interact with sales teams.

Sales qualified leads (SQLs) are leads screened by salespeople, oftentimes Sales Development Representatives (SDRs), for appropriate qualifying criteria to be followed-up with. Qualifying criteria include need, budget, capacity, time-frame, interest, or authority to purchase.

Online lead generation

Online lead generation is an Internet marketing term that refers to the generation of prospective consumer interest or inquiry into a business' products or services through the Internet. Leads, also known as contacts, can be generated for a variety of purposes: list building, e-newsletter list acquisition, building out reward programs, loyalty programs, or for other member acquisition programs.

Blogs

Blogging is an easy option to collect leads. Blogs are informative as well as very effective in collecting prospective leads to your offered product or service. Business Blogs follow the method of a give and take relationship as it offers you information while bloggers in turn get leads generated for them. Readers of blogs are easily call to action (CTA) benefitting the business.

Social media marketing

With the rise of social networking websites, social media is used by organizations and individuals to generate leads or gain business opportunities. Many companies actively participate on social networks including LinkedIn, Twitter and Facebook to find talent pools or market their new products and services.^[5] Many brands use social media marketing to grow their brands. So social medias are an effective place to own a brand and promote it. The major media platforms are Facebook, Instagram, LinkedIn, Twitter etc. as mentioned above. Its better to pick a few platforms that you think your target audience is on and which leads to lead generation than to be on all platforms. A social media can be used in many ways to create leads like the social media listening and engagement circle, social media analytics strategies, by social media advertising Now a days ,a business that wants to reach a specific set of audience at scale would run highly targeted social media advertising.

Email marketing

Email remains one of the main ways that businesses communicate with clients & vendors. Because of this, marketers often send messages to users’ inboxes. Many leads are generated every day with cold email campaigns and warm email campaigns. For the foreseeable future email campaigns remain a great email marketing tool.

Online advertising

There are three main pricing models in the online advertising market that marketers can use to buy advertising and generate leads:

• Cost per thousand (e.g. , Advertising.com), also known as cost per mille (CPM), uses pricing models that charge advertisers for impressions — i.e. the number of times people view an advertisement. Display advertising is commonly sold on a CPM pricing model. The problem with CPM advertising is that advertisers are charged even if the target audience does not click on (or even view) the advertisement.
• Cost per click advertising (e.g. AdWords, Yahoo! Search Marketing) overcomes this problem by charging advertisers only when the consumer clicks on the advertisement. However, due to increased competition, search keywords have become very expensive. A 2007 Doubleclick Performics Search trends report shows that there were nearly six times as many keywords with a cost per click (CPC) of more than $1 in January 2007 than the prior year. The cost per keyword increased by 33% and the cost per click rose by as much as 55%.
• Cost per action advertising (e.g. TalkLocal, Thumbtack) addresses the risk of CPM and CPC advertising by charging only by the lead. Like CPC, the price per lead can be bid up by demand. Also, like CPC, there are ways in which providers can commit fraud by manufacturing leads or blending one source of lead with another (example: search-driven leads with co-registration leads) to generate higher profits. For such marketers looking to pay only for specific actions/acquisitions, there are two options: CPL advertising (or online lead generation) and CPA advertising (also referred to as affiliate marketing). In CPL campaigns, advertisers pay for an interested lead — i.e. the contact information of a person interested in the advertiser's product or service. CPL campaigns are suitable for brand marketers and direct response marketers looking to engage consumers at multiple touchpoints — by building a newsletter list, community site, reward program or member acquisition program. In CPA campaigns, the advertiser typically pays for a completed sale involving a credit card transaction.

Recently,^[when?] there has been a rapid increase in online lead generation: banner and direct response advertising that works off a CPL pricing model. In a pay-per-acquisition (PPA) pricing model, advertisers pay only for qualified leads resulting from those actions, irrespective of the clicks or impressions that went into generating the lead. PPA advertising is playing an active role in online lead generation.

PPA pricing models are more advertiser-friendly as they are less susceptible to fraud and bots. With pay per click, providers can commit fraud by manufacturing leads or blending one source of lead with another (example: search-driven leads with co-registration leads) to generate higher profits for themselves.

A GP Bullhound research report stated that the online lead generation was growing at 71% YTY^[when?] — more than twice as fast as the online advertising market. The rapid growth is primarily driven by the advertiser demand for ROI-focused marketing, a trend that is expected to accelerate during a recession.^{[citation needed]}

Common types of opt-in ad units include:

• Co-registration advertising: The advertiser receives some or all of the standard fields collected by a site during the site's registration process.
• Full-page lead generation: The advertiser's offer appears as a full-page ad in an HTML format with relevant text and graphics. The advertiser receives the standard fields and answers to as many as twenty custom questions that s/he defines.
• Online surveys: Consumers are asked to complete a survey, including their demographic information and product and lifestyle interests. This information is used as a sales lead for advertisers, who purchase the consumer's information if provided. The consumer may 'opt-in' to receive correspondence from the advertiser and is therefore considered a qualified lead.

A common advertising metric for lead generation is cost per lead. The formula is Cost / Leads, for example, if 100 leads cost $1000, the cost per lead would be $10.

Healthcare

"The number of Cyberchondriacs has jumped to 175 million from 154 million last year, possibly as a result of the health care reform debate. Furthermore, frequency of usage has also increased. Fully 32% of all adults who online says they look for health information "often," compared to 22% last year." said Harris Interactive in a study completed and reported in August 2010 with demographics based in the United States of America.^[6]

Lead nurturing

Lead nurturing is the process of continuously contacting the potential buyer to update information and to improve the knowledge of the customer throughout the buying process. All lead information tends to change or become obsolete as time passes. To keep the information up to date, the Lead Manager needs to continuously contact the leads' contact to update the information, to deepen the information in a are often grouped into segments to the level of qualification present within an organization.^[7]

Lead nurturing process is the set of actions that the marketing team makes in order to nurture the leads. They can be both manual or automatic.

See also

• Direct marketing
• Direct selling
• Lead management
• Personal selling
• Sales
• Customer experience
• Outbound marketing
• B2B marketing

References

Further reading

• Lead Generation for the Complex Sale by Brian J. Carroll (ISBN 0-07-145897-2)
• Marketing Management by Philip Kotler (ISBN 0-13-033629-7)
• Marketing for Dummies (ISBN 978-1118880807)