What is lead generation, and why is it a source of contention for sales and marketing teams? What does a “good lead” look like anyway? Get answers to these questions about lead gen — and so much more!
What Is Lead Generation?
Usually considered a sub-objective of a Demand Generation strategy, Lead generation refers to the process of attracting and converting prospects into paying customers, or at the very least getting them into the sales funnel.
Lead generation is by and large a more focused effort toward familiarizing potential customers with a company’s value proposition with the end goal being conversion.
While the B2B landscape may always be changing, lead generation will always be important. Lead gen occurs within the second stage of a marketing funnel—meaning it happens after marketers have attracted an audience and are ready to hand them over to the sales team.
What is a Lead?
Let’s start with the basics—defining what exactly the elusive “lead” actually is. A lead is defined as any prospect who indicates interest in a company’s product or service.
Every company has their own definition of a “good lead.” Yet, generally speaking, a lead can be considered anyone who begins to exhibit buying behaviors. Pretty simple, right? Things start to get a little messier when sales and marketing don’t necessarily agree upon what “buying behavior” actually means,—and truthfully, this kind of buyer interest can be expressed in many different ways.
B2B sales and marketing leaders spend considerable time coming to an agreement on how much to value passive and active engagement. The end result is often a rubric of what cumulative or singular actions constitute a behaviorally qualified lead.
For example, a behavioral lead scoring rubric based on a 100-point threshold may award 50 points whenever a lead registers for a webinar. This lead would need to take additional action to reach the qualification benchmark of a 100 points. However, if another prospect were to request a product demo, the same system could auto-qualify awarding the prospect 100 points.
The Lead Generation Process
Lead scoring is a qualitative process of assigning numeric values to each lead you generate based on a combination of the behavior(s) a prospect demonstrates and how well their firmographic and demographic information aligns with a company’s ideal customer profile (ICP).
Given that the logic associated with lead scoring should help determine how qualified a lead is, or how likely they are to make a purchase, specific data points—like a company’s revenue or industry, or an individual’s job function and management level—should be weighted appropriately.
For example, a lead with a profile that matches a company’s buyer persona should not only be rated higher than a lead who is outside the typical customer profile; in many cases, the ideal prospect should be required to take less action in order to meet lead qualification criteria.
Stages of Lead Qualification
- Marketing Engaged Lead: Prospect who interacts with a company via a marketing channel.
- Marketing Qualified Lead: Prospect who has demonstrated enough behavior to be considered qualified and ready for sales intervention.
- Sales Generated Lead: Prospect from sales-sourced activity usually via outbound prospecting activity.
- Sales Accepted Lead: A prospect qualified either through a Sales Development Representative (SDR) or via a marketing campaign that an Account Executive is working.
- Sales Qualified Lead: Any qualified lead who was accepted, worked and then associated with a business opportunity.
B2B Lead Generation Sources
Leads don’t just magically appear in a company’s CRM (though, that would be nice!). There are a host of ways that sales and marketing professionals can attract potential customers, with some tactics that undoubtedly work better than others. When it comes to B2B lead sourcing, there are typically three courses of action: outbound prospecting, inbound marketing, and marketing campaigns.
A customer referral program is a great way to bridge the gap between wanting to find new leads and leveraging the ones you already have. The main benefit of adopting a referral program is that leads who were referred typically have a faster sales cycle because there’s already a level of built-in trust. Think about it: wouldn’t you be more likely to buy something if a good friend highly recommended it?
Outbound prospecting is a direct marketing channel where salespeople identify target customers and then directly reach out to them in order to introduce them to their company or product. Identifying target customers involves compiling lists of companies or individuals that sales reps believe would be the most likely to need their product/service. Examples of outbound prospecting include email outreach, social selling, and cold calling.
Inbound marketing is slightly more complex than outbound prospecting. As a business methodology, it is the process of attracting customers by creating and distributing relevant content and valuable experiences personalized to their specific needs. Think of inbound marketing as building a relationship with customers—a consultative relationship that continues even after they decide to make a purchase. The point is to engage them with content that will bring them to owned marketing channels, most commonly a company website, and in turn, evolve awareness into validated interest about a particular product or service.
Campaigns are what make companies memorable. Marketing campaigns aim to promote a highly focused effort that encourages customers towards a desired action. Not only that, but they also aim to humanize otherwise technical and jargony B2B companies. Campaigns are often created with a specific goal in mind, whether it be generating awareness or promoting a new product. Additionally, they should utilize multiple media channels including:
- Search Engine Marketing (SEM): 75% of searchers don’t go beyond the first page of their search results. SEM strategies help to ensure that your content makes the cut by strategically bidding on branded and non-branded keywords to give a company’s brand valuable real estate atop of the Search Engine Results Page (SERP) associated with aforementioned terms.
- Display Campaigns: Similar to SEM campaigns, display campaigns can either be deployed to a specific list of companies a go-to-market team is trying to engage or retarget companies in real-time by leveraging IP addresses associated with visitors who visit owned web properties. What’s more, display campaigns have very low CTR (only 0.17%).
- Content Syndication: Placing content, usually to generate awareness about a company’s value proposition, across trade publications. The content can be anything from eBooks and sponsored research to upcoming webinars and virtual events a company is participating in. Marketing teams can work with these publications to ensure the leads a vendor passes back as a conversion match a predetermined set of firmographic and demographic filters. Republishing blog posts on just two different sites can lead to a 34% increase in page views.
- Trade Shows: Investing sponsorship of industry events or even producing an event using internal resources. Usually leads are obtained through networking that occurs either at a company’s booth and any breakout sessions internal employees may be leading. Trade shows are incredibly conducive to lead generation because 81% of trade show attendees have buying authority.
Types Of B2B Lead Generation Strategies
It may be a cliche, but content is king—and the lifeblood of any lead generation effort. While an incredibly broad term, content marketing encompasses every type of format imaginable. The key to a sound content marketing strategy is mapping messaging to a sales funnel. For instance, even though interaction with case studies and product sheets may be indicative of a sales-ready lead, that doesn’t mean a marketing team should lead with this type of content, as these types of assets are usually introduced further down the sales process.
So, where does content marketing earn its reputation as a lead generation magnet?
As previously mentioned, oftentimes a marketing engaged lead is not ready for sales intervention at the point they enter the funnel. Emails are great for reaching people who are already familiar with a brand, product, or service. Nurturing prospects with an array of content that creates trust, authority and, of course, more behavioral engagement that (hopefully) accumulates to qualification.
SEO’s best friend: the blog post. Company blogs take commitment, but pay dividends in a variety of ways. First and foremost, blog posts are great ways to fit a lot of keywords and popular questions into one piece of content, and so they give companies a better chance of ranking high on SERPs without spending advertising dollars. Additionally, it provides an organic platform for a company to further establish itself as a subject matter expert in its domain.
Social media platforms make it incredibly easy for visitors to interact with a brand. Similar to email nurturing and blogging, a company’s social media presence provides a unique opportunity to promote a variety of initiatives, in a variety of ways. The interactive nature of the channel—it’s called SOCIAL media, after all—offers a chance to foster two-way conversations with current employees, customers, industry leads, and yes, potential leads, too. Above everything else, a strong social presence keeps a company top of mind.
Lead-to-Revenue Management (L2RM)
Lead-to-Revenue Management, otherwise known as L2RM, is the process of integrating metrics, processes and goals that correspond to a marketing strategy throughout the sales funnel. The end game? Understand the entire buying process and align engagement with results (revenue).
Key Components of L2RM:
A stage-based approach to turning prospective leads into buyers, usually broken out into three phases:
- Awareness: potential customers have diagnosed pain points and are beginning to conduct preliminary research about available solutions in the marketplace. As the widest section of the funnel, the main purpose of this stage is to improve the visibility of a brand and demonstrate expertise by accommodating prospects value-centric, top of funnel resources.
- Interest: the prospect is actively looking for solutions to improve business outcomes.
- Consideration: leads are officially converted to sales qualified opportunities and are viewed as prospective customers. They have a clear understanding of what their problem is, the solutions that could solve it, and what their budgets are.
- Decision: the qualified leads know everything there is to know about their pain point, the best solution for the problem, and are ready to select the provider to buy from.
Service Level Agreement (SLA)
Service Level Agreement (SLA) is a formal contract between Marketing and Sales that outlines exactly what each department is responsible for at each stage of the lead qualification process.
Using the goals and definitions mentioned in the previous section, a SLA helps set clear expectations for each team at each stage of the funnel. If diligently followed, a SLA should provide relative metrics go-to-market teams can use to measure success. Marketing is able to better understand its contributions by analyzing key performance indicators (KPIs) such as leads generated, qualified leads generated, sourced pipeline, and revenue. Sales goals should include follow-up time, follow-up frequency, and the percentage of leads sales is expected to follow-up with.
Just how effective can a SLA be if each party adheres to guidelines established? In fact, research shows that companies who have an active SLA are (source):
- 34% more likely to experience greater year-over-year ROI than companies who don’t have an SLA.
- 21% more likely to get greater budget allocations than companies who don’t have an SLA.
- And, 31% more likely to be hiring additional sales reps to meet demand.
Common Tools for L2RM
Customer Relationship Management (CRM)
As businesses grow, leadership needs to understand historical trends, current projections, and capture everything that happens in between.
CRMs help marketers and salespeople track sales from the very first touchpoint with a prospect, all the way to the final sale. It’s the foundation that houses much, if not all, of the data you can use to guide prospects through the sales funnel. Using that data, salespeople can easily segment prospects, making the entire sales process more streamlined.
Marketing Automation Platform (MAP)
You know all those little tasks that don’t take up too much time individually, but collectively eat up your day? Just like sales automation, marketing automation software can do those repetitive tasks for you, freeing marketers to focus on creation, rather than distribution. Marketing automation is great for managing things like email marketing, social media marketing, and ad campaigns in a way that makes it incredibly easy to personalize messaging.
In terms of productivity, sales automation software is the sales team’s holy grail. All of those annoying tasks that sales development reps and managers have to take time out of their days to perform can be made a part of sales automation — leaving more time for prospecting and lead nurturing.
The core components commonly included in a sales automation solution include:
- Dialer capabilities
- Email service (personalized templates, automated A/B testing)
- Activity management (automatic task creation, communication logging and more)
- Multi-touch, multi-channel sales sequence builder with the following capabilities:
- Triggered based on custom needs
- Create cadences across phone and email channels
- Measure performance of sales activity
Frequently Asked Questions
A roundup of common question on lead generation strategy, techniques, and best practices.
How do I generate leads in digital marketing?
There are myriad ways to generate digital marketing leads. Below are some of the most popular channels companies use:
- Email marketing: Email marketing is the old tried and true form of lead gen that has proven to withstand the test of time. With the introduction of CRM databases and marketing automation, sending highly personalized emails is easier than ever—and the best way to peak the interest of a potential customer.
- Content Marketing: Content is imperative to any marketing strategy, but the key is ensuring that your content is relevant enough to reach your intended audience. Yet when executed and distributed smartly, it’s proven itself to be the second best form of lead generation. Tip: create content around ICP pain points, and watch the leads roll in.
- Social Media Marketing: While arguably less effective than other forms of lead gen, social media marketing is not to be ignored. Don’t underestimate the power of a fully aligned and realized social media strategy.
- Landing page optimization: Your website, and more specifically the UX of your website can be a determining factor in your lead generation results. Landing pages are where most of your website leads will come from, so making sure your landing pages are optimized is essential.
What’s the difference between lead generation vs. demand generation?
The difference between lead generation and demand generation is subtle, yet incredibly important to understand. Where one focuses on the entire lead-to-revenue process (demand gen), the other focuses on the top of funnel conversions (lead gen).
Demand Generation: Demand generation focuses on positioning and brand awareness, and is typically done through marketing campaigns. The entire purpose of demand gen is garnering excitement about your overall company, product, or service—making people want to buy from you and then nurturing that interest into business opportunities. Demand generation primarily focuses on the entire customer journey.
Lead Generation: Lead gen is also based on marketing campaigns, yet the goal of it is to collect information about potential customers and turn them into leads that will then enter the sales funnel. When it comes to lead gen, content is also crucial, yet it’s used in a slightly different way. Lead gen is predicated on gated content that directs potential customers to a landing page, where they can then fill out a lead form in exchange for the content they want. Gating content helps keep less qualified leads out of the sales funnel, and allows salespeople to focus on those who are more likely to buy.
There is considerable overlap here in purpose and tactics. For instance, both demand generation and lead generation may use the following:
- Data sheets
- Blog posts
But the positioning of each tactic varies. Demand generation teams may decide to host a thought leadership webinar about a particular industry pain point. The content, in a demand gen webinar, would primarily be evergreen and product agnostic in nature. Whereas a lead generation webinar would focus more on trying similar problem-solution messaging, but with a more direct tie into a brand’s value proposition through the use of product features and customer testimonials.
What are the common pain points of lead generation?
While lead generation is the ultimate goal, it’s by no means a simple feat. In fact, there are a host of things that stand in your way of successfully getting potential customers into the sales funnel. Yet when considered and addressed when developing a lead gen strategy, you can certainly come out on top.
- Data quality: A good way of creating content that will generate leads is analyzing your database to look for trends and attributes. Yet this information won’t be accurate if your data is out of date or inaccurate.
- Lead quality: What good is a lead if they have no real intention on buying, now or ever? Many sales reps say their biggest hurdle when it comes to lead generation is lead quality. Traffic to your website is good, but it doesn’t mean much if they don’t convert into MQLs or SQLs.
- Measuring lead gen success: How does one measure the quality of a lead? It can be difficult to determine how good a lead is, or even if your lead gen strategy is working at all. Some indicators you can look at to measure lead gen success are CTRs, conversion rate, time to conversion, leads per channel, etc.
What is the average lead to conversion rate?
B2B sales processes are complex, there’s no doubt about that. B2B sales reps have to deal with a myriad of stakeholders, and an exceptionally long decision making process, so lead conversion rates are going to be much lower than other B2C companies.
In fact, within the B2B space, anything from 5% to 10% can be considered an average conversion rate.
Achieving better conversion rates can be tricky, but there are always tweaks that can be made to a lead gen strategy to encourage more conversions.
- Streamline sign-up forms: leads will be more likely to sign up for something if they only have to fill out three lines, rather than ten.
- Provide a clear and straightforward call to action (CTA): CTAs inform potential customers about what their next steps should be, and what they need to do in order to get there.
When it comes to B2B conversion rates, it’s also important to note that leads are generated through a variety of channels, and those channels can generate different amounts of leads, as well as different quality of leads. When calculating average number of lead conversion, it can be useful to identify which channel is resulting in the most converted leads, and where they end up along the sales funnel.