What is Lead Generation?
Any person who has an interest in a company’s product or service is considered a lead. Not anyone and everyone is a lead, as people have different preferences and needs. Many businesses make the mistake of marketing to everyone when they should focus on people who are interested in what the company has to offer.
Lead generation can be defined as the process of attracting prospects and converting them into someone who has an interest in your company’s products and services. Modern brands make use of various lead generation strategies such as:
- Email marketing
- Social media marketing
- Live events and seminars
- Website landing pages
These are just a few strategies that you can use to attract potential customers to your product or offer. Most companies prefer to stick to what works best for them, as lead generation strategies differ according to industry.
Email and social media marketing for their lead generation might work for online fashion stores, but the same strategies may not work for software companies. People looking for software might require more details and information on the product, which is why a blog or a series of webinars could work better as lead generation tools.
Why is Lead Generation Important for Brands?
When a person shows interest in your brand’s products or services, the steps that person takes towards making their first purchase just seem natural. You just helped them to fulfill a need or solve a problem.
When a person has no interest in what you have to offer, yet you still try to convince them to make a purchase, they may feel like they are being pushed to spend their money. This can make the customer feel like they were forced to buy your product and it can hurt your brand’s reputation.
Attending to your target audience only through lead generation can ensure that your brand is ideally matched with the right customers. More benefits of lead generation include:
- Target the right customers – Companies can focus their resources on targeting specific markets, which in turn will save money and increases sales (improved ROI).
- Increased awareness – Lead generation can also build brand awareness and reputation. When people discover your brand, you will be able to supply them with more information regarding product features and benefits.
- Opportunity to collect valuable prospect information – Lead generation has the potential to gather important marketing information from prospects. Customer information such as needs wants, and preferences can assist you in tailoring your product or service to suit your customers’ needs. Eg. Companies can obtain this information through registration forms.
- Brand Loyalty – Companies can build larger communities of like-minded customers, which can, in turn, improve customer loyalty.
Most marketing departments measure lead quantity when determining a successful lead generation campaign. Sales teams, on the other hand, focus on lead quality. Leads with a clear intent to purchase your product, have the finances and means to do so, and meet the parameters set by you are considered as quality leads.
If a company focuses on lead quality, the chances of converting a lead into a customer drastically increase. Having higher conversion rates will allow you to confidently invest in your quality leads, increasing your return on investment (ROI).
Focusing on quality leads can potentially increase the rate of new customer acquisition. Getting new customers at a high rate will allow you to quickly grow a loyal customer base. This can also improve your ROI in the long term, as the faster you build your customer base, the sooner you will be able to retarget new and existing customers.
As mentioned above, focusing on quality leads can drastically improve conversion rates and ROI. However, there are a few drawbacks to quality leads. For instance, a sales team that focuses solely on their quality leads can end up neglecting their other duties such as after sales calls or product deliveries.
Investing time and money into quality leads is still a risk that salespeople will have to take. A quality lead can still back out at the very last moment. You won’t just lose the deal, but you would have lost all that time and effort that went into convincing the lead to purchase your product.
Lead quality is usually determined after going through a list of leads that were acquired through a lead generation campaign. Most campaigns will focus on lead quantity. So marketers and sales teams will still have to go through all leads to determine their quality leads.