What is Lead Generation? The Guide to Building Buyer Journeys and Increasing Sales
Success in business is not only about selling the right product or service.
It also depends on finding the right people to sell to.
That’s where lead generation comes in.
The power of a good lead generation strategy can be enormous. Companies with well-developed lead generation strategies see a 133% increase in revenue.
But, it’s not easy. In fact, 61% of marketers state that generating traffic and leads is their top challenge.
If lead generation is so important, why do so many marketers find it challenging?
Think of it like this – knowledge is power. Knowing how to apply that knowledge is success.
In this guide, we’ll give you all the knowledge you need to build a successful lead generation strategy, but even more importantly, we’ll share ways to actually apply it so that you get the results you want.
What is Lead Generation?
In simple terms, lead generation is the process of attracting potential customers (aka leads) who show some level of interest in your product or service.
It’s not just about casting a wide net and hoping for the best. There’s much more to it than that. It’s about strategic fishing – luring in potential customers who are likely to convert into buyers. Hopefully, these buyers will then become loyal brand supporters and advocates.
Without effective lead generation, businesses struggle to reach out to potential customers, which can lead to lower sales and reduced growth.
Lead generation is all about catching the attention of potential buyers and getting them to stay engaged with your brand. Or to put it in terms of the marketing funnel, the goal of lead generation is to guide potential customers on their journey from awareness to conversion.
The Lead Generation Process
Let’s start with the buyer journey, which is the path your potential customer takes from the first time they become aware of your product or service, to the moment they decide to make a purchase, and even beyond.
- Recognizing the need: The potential customer realizes they have a need or desire that may need fulfilling.
- Information search: The customer conducts research to gather information about possible products or solutions.
- Evaluation: The customer weighs their options, considering factors such as features, benefits, prices, and reviews.
- Purchase: The customer makes a decision and chooses their preferred product/service.
- Post-purchase evaluation: After the purchase, the customer assesses their experience and satisfaction with the chosen product/service.
- Repeat purchases: If satisfied, the customer may engage in future purchases or consider revisiting the same product/service, creating a potential cycle of repeat business.
The lead generation process begins with helping customers to recognize the need for your product or service. To do that, you need to clearly define your ideal customer by following these steps:
- Step 1 – Identify your target audience: If you’re trying to sell surfboards, your efforts will be wasted if you’re marketing to people who live in landlocked areas. Defining your target audience is about understanding who your ideal customers are, what they need, and how your product or service can meet that need.
- Step 2 – Create buyer personas: These are semi-fictional representations of your ideal customers based on real data and some educated speculation. Think of them as characters in the story of your business. Creating detailed buyer personas helps you understand your customers’ needs, behaviors, and pain points better. It also aids in customizing your marketing efforts to different audience segments.
- Step 3 – Set clear objectives: Are you looking to attract a certain number of new leads per month? Do you want to increase conversions from a particular marketing channel? By setting SMART goals (Specific, Measurable, Achievable, Relevant, and Time-Bound), you can keep your lead generation efforts focused and measure your success in a meaningful way.
9 Strategies for Effective Lead Generation
Once you have nailed down your target market, the next step is to develop some strategies to reach out to them or attract them to your brand.
Website optimization for lead capture:
First things first, your website should be your lead generation powerhouse. Think of it as your 24/7 sales rep, always ready to engage with visitors and turn them into leads. Optimizing your website for lead capture involves making your site easy to navigate, providing valuable content, and including strategically placed CTAs, forms, and chatbots.
High-converting landing pages:
A well-designed landing page can provide detailed information about your product or service, address potential objections, and most importantly, encourage visitors to take action. Make sure your landing pages are clean, concise, and focused on one primary CTA.
Effective Calls-to-Action (CTAs):
A CTA is a prompt for your visitor to take a certain action. This could be anything from downloading a whitepaper, signing up for a free trial, or booking a consultation. An effective CTA is clear, compelling, and leaves no room for ambiguity about what the visitor should do next.
Lead magnets are your ‘freebies’ that you offer to website visitors in exchange for their contact information. Lead magnets are valuable pieces of content like ebooks, whitepapers, or webinars. The key here is to make sure your lead magnet provides genuine value. It’s not just about getting their email; it’s about starting a relationship based on trust and mutual benefit.
Content marketing is a long-term strategy that involves creating and sharing valuable content to attract and engage a defined audience. The goal? To establish credibility, build trust, and ultimately, convert your audience into leads and customers. Remember, the more value you provide, the more likely your audience will be to consider you when they’re ready to buy.
Social platforms are a great way to reach your audience where they’re already spending time. For instance, if you’re in the B2B space, LinkedIn can be a goldmine for lead generation. With its professional focus and detailed targeting options, LinkedIn can help you reach the decision-makers in your target businesses.
Paid advertising channels:
Give your lead generation efforts a boost by getting your brand in front of a wider or more targeted audience. This can range from search engine marketing (SEM) to social media ads. Native advertising is one such channel where your ad matches the form, feel, and function of the content of the media on which it appears, providing a less intrusive experience for users. It’s a great way to attract interest and generate leads on the open web, including news and entertainment websites.
Despite being one of the ‘oldest’ forms of digital marketing, email marketing is still alive and well. In fact, it is consistently named by marketers as one of their most important and effective lead generation tactics. By sending valuable content, compelling messaging, or tempting offers directly to someone’s inbox, you can nurture relationships and guide prospects through the buyer journey.
Lead nurturing with marketing automation:
This is all about building relationships with potential customers even if they’re not currently looking to buy your product or service. Marketing automation tools can help you send the right message at the right time, ensuring that leads stay engaged and don’t fall through the cracks.
Key Lead Generation Tools and Technologies
Marketers need a variety of tools and technologies to create a successful lead generation strategy. Let’s take a look at some of the most useful ones.
Customer Relationship Management (CRM) systems
A CRM is the ‘brain’ of your lead generation operations. A CRM stores all your customer data in one place, giving you a 360-degree view of your interactions with potential and existing customers. Plus, they can help you track the effectiveness of your marketing activities, making them a must-have for any serious marketer.
Lead scoring and tracking tools
Imagine being able to rank your leads based on how likely they are to convert. Fortunately, these days you can make that a reality with tools to prioritize your leads, allowing you to focus your efforts on those most likely to become customers. And tracking tools? They help you understand the path your leads take on their buyer journey, so you can identify what works and what doesn’t.
A/B testing and analytics platforms
A/B testing and analytics platforms are your ‘truth seekers’. They cut through the guesswork and show you what’s really happening. A/B testing allows you to compare two versions of a web page, email, or other marketing asset to see which performs better. Meanwhile, analytics platforms give you insights into your website traffic, user behavior, and more. This information is pure gold when it comes to optimizing your lead generation strategies.
Best Practices for Successful Lead Generation
Don’t let your lead generation strategy be luck-based. Yes, there is a certain element of luck as you need to get a lot of people engaged with your brand before you generate qualified leads, but in this world – you make your own luck. How? By following lead generation best practices.
Lead Gen Best Practice #1 – Personalize and tailor the buyer journey
When it comes to capturing leads, one size definitely does not fit all. Your potential customers want to feel like you ‘get’ them, and nothing does this better than personalization. When you tailor the buyer journey, your leads feel understood, valued, and are more likely to convert.
Here are some personalization ideas:
- Customized content: Tailoring content to individual preferences – blogs, emails, etc.
- Personalized recommendations: Offering tailored product or service suggestions.
- Individualized communication: Addressing specific needs or pain points.
- Adaptive user experience: Adapting website features to user preferences.
- Personalized offers or discounts: Providing tailored incentives.
- Tailored follow-up: Customizing interactions based on buyer actions.
Lead Gen Best Practice #2 – Build trust and credibility
Trust is the foundation of any relationship, and the one between your brand and potential customers is no exception.
Maintain transparency in your operations, honesty in your communications, and always make sure you deliver on your promises to build trust and credibility. And never underestimate the power of testimonials and reviews – a little social proof can go a long way in assuring leads that you’re the real deal.
Lead Gen Best Practice #3 – Craft creative and compelling touchpoints
Each interaction with your brand is an opportunity to impress and engage. That’s why it’s important to create engaging touchpoints across all stages of the buyer journey.
From engaging social media posts to interactive webinars, there are tons of ways to capture your audience’s attention. The key here is to be innovative and think outside the box. Don’t just do what everyone else is doing – zig while others zag.
For instance, instead of hosting a “same-old, same-old” industry conference, organize a virtual summit that features interactive breakout sessions, gamified activities, and live Q&A sessions with industry experts. This unconventional approach may provide a unique and engaging experience that sets your brand apart from the competition. In today’s business world, you want to create impactful touchpoints that leave a lasting impression on your target audience.
Lead Gen Best Practice #4 – Continuous testing and optimization
In the world of lead generation, the learning never stops. What worked yesterday might not work today, and that’s why continuous testing and optimization are so important.
A/B testing, analytics, and regular audits of your strategies can help you stay on top of your game. Remember, every misstep is an opportunity to learn and improve. More on this in the next section – measuring lead generation success.
Lead Gen Best Practice #5 – Compliance with data protection regulations
Last but definitely not least, is compliance with online data laws. Respect for privacy and data security is non-negotiable.
Make sure you’re aware of and comply with regulations like the GDPR or CCPA, depending on where your leads are located. Ignoring this not only harms your reputation but can also lead to significant penalties. When it comes to data, always think ‘safety first’.
Measuring Lead Generation Success
When it comes to your lead generation strategy – you can’t just set it and forget it. Hoping for the best rarely leads to success.
To succeed in lead generation, you need to measure the performance of your strategies and campaigns. Once you have the data you need, you can make adjustments and keep fine-tuning your approach to get the best results.
Lead generation: Key metrics to track
There are several key metrics to keep an eye on when evaluating your lead generation success. Here are some of the main ones:
- Number of new leads: how many people have shown interest in your product or service
- Lead conversion rate: the percentage of leads that turn into customers
- Time to conversion: how long it takes for a lead to become a customer
- Cost per lead: the average amount of money spent to acquire each new lead.
- Lead quality: the measure of how well the leads align with your target audience and their likelihood to convert into customers.
- Conversion rate by source: the percentage of leads that convert into customers based on the marketing channel or source they originated from (e.g., organic search, social media, paid advertising).
- Return on investment (ROI): the financial return generated from your lead generation efforts compared to the cost of those efforts.
- Customer lifetime value (CLTV): the predicted net profit generated over the entire relationship with a customer, taking into account repeat purchases and customer retention.
- Sales cycle length: the average time it takes for a lead to move through the sales pipeline and convert into a customer.
- Lead engagement metrics: tracking metrics such as email open rates, click-through rates, website visit duration, and social media engagement to measure the level of engagement and interest from your leads.
Analyzing conversion rates
Conversion rates are like the taste testers of your lead generation strategies. They’re a reliable way to know if your efforts are resonating with your audience.
A high conversion rate means your leads are finding what they’re looking for and taking the desired action, whether that’s signing up for a newsletter, downloading a whitepaper, or making a purchase.
If your conversion rates are lower than you’d like, it might be time to revisit your call-to-actions or perhaps the overall user experience on your website or landing pages.
Assessing Return on Investment (ROI)
ROI tells you whether the money you’re investing in lead generation is actually leading to profits.
To calculate ROI, subtract the cost of your lead generation efforts from the revenue they generate, then divide by the cost and multiply by 100 to get a percentage.
Here’s a quick example:
Cost of lead generation efforts: $10,000
Revenue generated from those efforts: $25,000
To calculate ROI, you can follow these steps:
Subtract the cost of your lead generation efforts from the revenue generated:
$25,000 – $10,000 = $15,000
Divide the result by the cost of your lead generation efforts:
$15,000 / $10,000 = 1.5
Multiply the quotient by 100 to get the ROI percentage:
1.5 * 100 = 150%
Ideally, you want your ROI to be more than the break-even point of 100%. If it’s less, then you’re losing money on your strategy. If your ROI isn’t where you want it to be, don’t fret. That’s your cue to dig deeper into your strategies, identify areas of improvement, and roll up your sleeves for some tweaking.
Overcoming Lead Generation Challenges
Lead generation is not without its challenges of course. Let’s take a look at some of the common ones and how to overcome them:
Identifying common roadblocks
Are you struggling to reach the right audience? Are your leads not converting to sales? Perhaps you’re facing difficulties in effectively nurturing your leads, or you’re challenged by an insufficient budget or resources for comprehensive lead generation strategies.
Knowing what’s standing in your way is the first step toward plotting a new course. Some other common roadblocks are:
- Insufficient budget or resources
- Poor lead quality
- Lack of alignment between marketing and sales
- Inaccurate or outdated data
- Competitive landscape
Strategies for overcoming lead gen challenges
- Struggling to reach the right audience: It may be time to get back to basics. Revisit your buyer personas and target audience identification strategies. Are they still accurate? Have the needs and behaviors of your audience changed?
- Leads aren’t converting to sales: Scrutinize your conversion paths. Check your calls-to-action, landing pages, and overall website usability. Maybe your offer isn’t compelling enough, or perhaps it’s time for a website revamp.
- Challenges in lead nurturing: Consider implementing or improving your marketing automation efforts. Remember, a lead is like a plant that needs to be watered and cared for regularly to blossom into a sale.
- Budget constraints holding you back: Think about optimizing your current strategies. Sometimes, the secret to success isn’t spending more, but spending smarter. Use the analytics data to understand which channels are performing best and focus more on those.
To put it in simple terms, lead generation is all about understanding who your target audience is, engaging with them, nurturing them, earning their trust, and guiding them toward a sale. To build a solid lead generation strategy, you need to do the following things:
- Understand the buyer’s journey: The buyer’s journey is at the heart of lead generation. It’s about understanding your prospects’ needs, problems, and desires at each stage of their journey, and positioning your offerings to meet those needs.
- Strategize to win: From creating high-converting landing pages and compelling CTAs to implementing effective email marketing and nurturing leads with marketing automation, effective strategies are your stepping stones to lead generation success.
- Empower with tools: Leveraging the right tools, like CRM systems, lead scoring tools, and analytics platforms, can streamline your processes, provide valuable insights, and ultimately boost your lead generation efforts.
- The measure of success: Knowing what to measure and how to analyze your results is crucial. Keep a close eye on key metrics, conversion rates, and ROI to assess your progress and make data-driven decisions.