Business Techniques – What is Lead Generation in Marketing?
Ever since the internet has taken over marketing in almost every way, there’s been a lot of talk about “leads”. The days of cold calling your way through a phonebook are long gone, and now marketers only bother going after people who have already shown an interest in their product and offered up their personal information because they want to learn more.
Marketers have learned that this is a much more effective way of generating sales, and as a result have become all about lead generation. What is lead generation, you ask? Well, let’s cover that right now, and talk about how lead generation applies to your marketing efforts.
What is a Lead?
To put it simply, a lead is someone who has shown interest in your products or services. You haven’t done business with them yet, but they may have stumbled upon your website and indicated that they wanted to learn more. Whether they did this by signing up for a mailing list or leaving their cell phone number for you to call, it’s all the same. “Lead generation” is how you get them to do that.
How Has Lead Generation Evolved?
In the past, businesses would buy a list of names from relevant companies willing to sell their information, or they would use the cold call approach. Ever since the internet came around, however, things have changed. You no longer have to buy leads, you can generate your own. In this manner, the question of “what is lead generation?” has now changed to “how can I optimize my lead generation strategy?”
The standard approach to generating leads now is for a business to have a landing page where they collect email addresses and other personal information. To get people to that landing page, they use a variety of techniques ranging from search engine optimization to other inbound and outbound marketing strategies.
Are All Leads Created Equal?
No, they aren’t. Leads are sorted into categories based on how likely they are to make a purchase. Marketing qualified leads are more likely to make a purchase than just an average lead, for example. Sales qualified leads are even more likely, and are typically only a couple steps away from making a purchase. An attempt to optimize your company’s website for Yelp is more likely to generate an MQL or an SQL, for instance. It’s up to the sales and marketing teams within a business to work together in order to determine which leads have more potential.
They have many tools at their disposal to determine this as well. Things like Google analytics, click-through rate, cost per MQL, time to conversion, number of MQLs, and ROI are all helpful in measuring the quality of your leads. The leads that perform the best according to these metrics will receive the best lead score, and thus will rank the highest.
There are two types of lead scoring, explicit and implicit. Explicit lead scoring takes into consideration how close the profile of a lead matches a buyer persona of what you would consider being the ideal customer. It takes into account things like industry, location, and job title of your lead. This type of lead scoring is better for showing you how relevant a lead is to your company.
Implicit lead scoring is a little more comprehensive, and it measures all the ways in which a potential lead tends to interact with your business. Indicators such as how many visits the lead has made to your site, what actions they have taken there, and what kind of responses they have made to your email marketing efforts are all taken into account here.
By charting all this data, implicit lead scoring is able to paint an accurate picture of how much interest your potential lead has in your business.
Using Lead Generation in Your Business
One of the first questions you have when dipping your toes into marketing for a company of any kind is, “What is lead generation?” Understanding the answer to this question is crucial to your success. Generating leads is not the same as it used to be, and is almost exclusively self-driven now.
Inbound marketing like content creation and search engine optimization is the best way for you to generate leads nowadays, and having a good lead scoring system is crucial to converting those leads into sales. Ultimately, a successful lead generation comes down to quality marketing, and successful lead conversion comes down to quality lead scoring.