Where does your business get sales leads? Many businesses rely on word of mouth, referrals from existing customers or repeat sales, but the most successful businesses create an ongoing lead generation system to keep actively working to find and identify new sales prospects.
Lead generation is a multi-step process that includes proactively looking for new sales leads, doing research to find out which sales prospects are a good fit for your business and conducting lead qualification processes to determine which sales prospects are ready to buy. This is followed by ongoing lead management activities to prioritize which sales leads are most likely to buy, and then building relationships.
Broadly speaking, there are two types of lead generation activities: outbound lead generation, which includes cold calls, e-mail marketing, direct mail, or buying advertising, and inbound lead generation, which includes websites, content marketing, and social media marketing.
Many business owners are familiar with the concept of outbound lead generation, and for business-to-business (B2B) companies, outbound lead generation is still one of the most effective tactics. According to a survey published in Marketing Profs, 39% of B2B companies said outbound lead generation techniques were the most effective way for them to get new sales leads.
Outbound lead generation will never go away, as long as it works, but more businesses are looking to get sales leads from inbound lead generation as well. According to the same Marketing Profs survey, 71% of B2B companies are using content marketing to generate new sales leads. With inbound lead generation, instead of interrupting people with a phone call or a TV ad, or buying time to put a message in front of someone else’s audience, your business uses content marketing, search engine marketing and social media to build an online audience of your own.
The promise of inbound lead generation is that it makes it possible for businesses to get more sales leads – not based on the size of their advertising budget, but on the quality of their ideas. With inbound lead generation, your company can set up your own website and create content that helps answer your prospective customers’ questions and makes them want to engage with you. With outbound lead generation, your business has to go out and find new customers. With inbound lead generation, new customers find you.
We talked with Mike Volpe, CMO of HubSpot, a company that helps businesses improve their inbound lead generation, about some of the biggest trends and best practices in lead generation.
“The biggest mistake most companies make in sales and marketing is not understanding that the way people shop and buy has changed,” Volpe said.
In the old days, companies could buy TV commercials and print ads in newspapers and magazines, and trust that their messages would be seen by their target audience. But in today’s busy, hyper-connected digital media world, interrupting people is no longer the most effective way to sell.
“You can no longer interrupt your way into people's lives,” Volpe said. “Instead, you need to earn their attention with an inbound experience. Consumers fast forward through commercials, throw away direct mail, and block calls from people they don't know or recognize, so trying to spam, cold call, or rent your way into people's lives simply won't work. "Businesses need to transform how they market and sell to match how consumers shop and buy.”
One aspect of how people shop and buy that has drastically changed in recent years is the rise of online research. According to 2013 stats from GE Capital Retail Bank, 81% of consumers go online to do research for major purchases prior to going to the store – up 20% from the year before. People spend an average of 79 days researching a major purchase. This means that it’s more important than ever for businesses to present a welcoming, engaging website that can help answer customers’ questions and assist customers throughout their research process.
Companies that have a full-time sales staff are often trying to help their sales people get more sales leads and save time by doing a better job of qualifying and sorting their sales leads. Ideally, you want your sales people to only spend time talking with prospective customers who are most likely to be a good fit to buy from you.
“With a limited number of hours in a day, finding a way to prioritize prospects based on their likelihood to buy and their interest in your product is a challenge,” said Volpe. “Our sales team was built with a measurable, scalable approach. We measured everything possible to understand what worked and what didn't so we could test, learn, and apply what worked at every stage.”
One of the simplest ways to improve your lead generation process is by coming up with a system for lead scoring, or ranking your sales leads based on the likelihood that the customer will want to buy. For example, this could be as simple as a spreadsheet with a list of each prospect’s name, details and phone number, and a few notes on how you got connected with them. Then, you can assign each prospect a number based on how ready they seem to be to buy.
Lead scoring can be a subtle art, but it’s important to make at least a basic effort to sort out the most promising sales leads so your sales people can focus on the highest priority leads first. Many B2B companies are not doing sales lead scoring at all, or are not doing it properly. According to stats from MarketingSherpa cited by HubSpot, 79% of B2B marketers have not established lead scoring, and only 56% of B2B organizations verify valid sales leads before the leads get passed on to the sales team.
Every business needs to have a constantly refreshed pipeline of sales opportunities. Even when business is good, you should have processes in place to keep seeking out new sales opportunities to pursue during lulls. One of the best ways to make lead generation a constant part of your business is to involve your sales reps in creating content for your company blog, which helps ensure your website is speaking in the language of your customers and answering their biggest concerns.
"Your company's blog should proactively answer the top ten questions you get from potential customers every day," Volpe said. "Make it easier than ever for your customers to find the information they need about your approach."
For example, many customers will want to know not just about your products or services, but about your company’s unique personality and culture. What is the story of your company? How does your company work with customers? What makes your company different? Why should people do business with you instead of one of your competitors? These are all of the questions that you should ask yourself, and answer with your company’s blog articles and other content marketing.
If your business is going through a slow period, you might want to invest more time in creating content. According to HubSpot’s marketing stats from 2012, companies that blog more frequently tend to get more customers — 92% of companies who blogged multiple times a day acquired customers through their blog.
One of the most important aspects of a good lead generation process is that it measures results — at every stage — to see what works and what can be improved. HubSpot proposes a list of 12 basic metrics every company can use to track the results of their lead generation process, including quantity metrics such as reach, total leads generated, and projected revenue based on the current number of sales prospects. Quality metrics are also important, including the total percentage of leads that ultimately become buyers and average deal size.
In traditional advertising, big companies with big budgets tend to get the most success because they can afford to buy the most ads and put their messages in front of the biggest audience. But with inbound lead generation, even small businesses can get great results because they compete based on the quality of their ideas and the value of the content they create and share.
If your company can write excellent blog posts, make fun YouTube videos or share really compelling customer success stories that are relevant to your customers, you might get much better lead generation results than you would have by trying to buy ads to compete with the bigger companies in your industry.
“The nice thing about inbound marketing is that it's about the width of your brain, not the width of your wallet, so small businesses can really excel by sharing remarkable content and ideas,” Volpe said.
Lead generation will always be an important part of running a business, and there are more options than ever before. Whether your company relies on traditional outbound lead generation tactics like cold calling and networking at trade shows, or inbound lead generation like content marketing, there are many tools available to manage the process more efficiently and measure results along the way – hopefully turning more of your sales leads into sales.
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