Lead Generation: How to Generate Qualified Leads
Every business wants to generate new business leads. The challenge is generating qualified leads that convert into long-term profitable clients/customers.
The quality of your leads is definitely more important than the quantity, so qualifying your leads saves both time and money.
Lead generation typically involves initiating, planning, executing and optimizing marketing programs and tactics across acquisition, conversion and retention efforts, including:
- Online advertising including search advertising, banner buys, Facebook, LinkedIn, SEM, affiliate deals and 3rd party email
- Social media amplification, engagement and conversion
- Website and Facebook landing pages and customer experiences
- Lead nurturing, segmentation and multi-channel communications
- Content marketing to attract and educate prospects
Many times what marketing people think of as a “lead” is not considered a worthwhile lead for a salesperson to follow up on. Or, there isn’t a process set up to ensure that leads are handled most cost-effectively and quickly.
Lead generation requires excellent partnership between sales and marketing. Sales and marketing need to agree on criteria and definitions for:
- Who’s a suspect?
- Who’s a prospect?
- Who’s a lead?
- Who’s a qualified lead?
- When is a lead “dead”?
There has to be a solid understanding and agreement between anyone in marketing and sales about what is a “qualified” lead and what the process is for handling leads so a prospective customer doesn’t “fall through the cracks.” It’s important to outline ahead of time who is going to do what when and ensure there is some “quality control” to ensure that leads are followed up with in a timely manner.
Great wisdom from this lead generation marketer:
I need to constantly remind myself: it’s all about getting ‘at bats’ for the field sales org. Yes, the buying process and technology has changed, but that interaction – the face to face or time on the phone between a sales rep and a customer – is still what’s most important.”
Marketing automation software helps sales and marketing teams manage the sales “pipeline”.
How to attract qualified prospects?
1. Make an offer that will attract qualified and PROFITABLE prospects
Use promotional offers to attract qualified new customers, not people who want a free gadget.
2. Follow-up with “leads” to qualify and nurture them
This is called lead nurturing. Lead nurturing is like “watering the seeds” until they become new customers or clients.
Leads, suspects and prospects
Suspects are people who visit your website, come into your store or stop by your trade show booth.
These people are unknown and unqualified. They could be “tire kickers” or people ready to make a huge order. You don’t know.
Leads are suspects.
Many businesses choose to pursue all incoming leads. This can waste a lot of time and money. These “leads” may result in the same success you’d have cold calling.
Smart sales people know to ask some “qualifying questions” to determine if the lead is a worthwhile prospect to nurture.
A “qualified lead” (or prospect) is a person or company who has the known potential to spend money with your business.
You know their name, contact information and in a B2B sale, their company and job title. You know they have a genuine interest in the product or service you sell.
These people have been pre-qualified and should be nurtured further to get a sale.
Quantity leads versus quality leads. You want both quality and quantity.
The goal of marketing and lead generation is often to get as many people through the door as possible. It’s easy to generate leads: give away a free electronic gift. That wastes a lot of time and money.
Instead, focus on attracting the most qualified prospects that turn into full-paying, long-term, profitable (and pleasant) customers.
Measure conversion rates. Make high conversion rates to qualified leads your measurement of success. And then measure the conversion rates from pre-qualified leads (prospects) to customers and then to your most profitable customers.
If your company is generating leads but your conversion rate is still low, it may not be the result of bad salespeople. It may be the result of marketing programs that are attracting suspects, not qualified leads.
Great advice on leads vs. conversion
This is advice from Dave Blanchard, an ex Hewlett-Packard marketing executive who now advises small businesses on marketing. SEO stands for search engine optimization, a technique to attract more visitors to your website for free by offering content and articles and information that people are searching for.
I’m awed by the SEO community, but I think they’re missing the point. Most of their effort is aimed at creating innovative strategies and tactics to get web pages ranked highly which ultimately drives traffic. The more enlighten ones align their compensation with performance. ‘If you don’t rank, you don’t pay,’ or even better, ‘We’ll increase your traffic – Guaranteed.’ But is this really the goal? No business survives on website traffic. What a business really needs is traffic that converts to a lead and ultimately a sale.
“Far too many SEO firms take their clients half way to their goal (sales growth) and say ‘good luck, hope it all works out from here,’ when what they should be doing is optimizing not for traffic but conversions. Even when the focus moves to conversion, too often they are still thinking within the box of the website. They ask, ‘What can we do to get return visits?’ But it’s not ABOUT the website. It’s about engagement through whatever means best serves the customer. That may mean getting people to Friend us on Facebook or Follow us on Twitter or ask for our free report or attend our webinar or call us. And it may mean all of these things at different times.
“This broader focus calls for a completely different set of skills. Developing lead nurturing strategies, creating content that engages and adds value all the way up to and beyond the point of sale, and integrating web, e-mail, direct mail, personal follow up and other inbound and outbound marketing methods. Tactics that get web visitors to jump forward, identify themselves and request more personalized communication. In sum, the ability to coordinate and automate a collection of marketing messages so that the right one gets to the right prospect at the right time via the right medium.
“Driving traffic to your website is a critical piece of the marketing puzzle that requires a skilled SEO expert to do it right. But it is only a piece. To grow your business, you need the rest of the conversion puzzle, too.”
How is the prospective customer or client contacting you?
Often when a customer or prospective customer or client makes a phone call, they want immediate information and they are actively researching or shopping.
When a prospective customer sends an email, they may be more in an “information gathering” mode.
If they download a report or white paper, they may be “learning” and not yet ready to buy.
If they visit your website or blog or “like” your Facebook page, they may be doing the equivalent of “just browsing.” They may also be your competitor monitoring what you’re doing.
What’s key is to figure out how much you will spend on each of these different customer touch points. How can you decrease the cost of pre-sales support without negatively impacting customer acquisition and satisfaction? Many prospects will want to talk to a knowledgeable (expensive) sales person who will educate and explain things to them in person. That’s ideal for the customer but may not be financially feasible for the profitability of the company. What is the total lifetime value of a new customer or client to the company? How much money (time) can be invested on what’s referred to as “onboarding” (educating a prospect to bring them onboard as a customer)? That’s all part of determining the cost of customer acquisition which should be calculated considering all marketing and sales costs.
How do you find new customers? And how do you find new customers that are profitable? There is a difference. It’s easy to acquire customers – offer something for free, make a great price off deal. But will those customers stick around and pay full price? Probably not. They will be what are described as “switchers” which means they switch from brand to brand based on whoever is offering the best deal or price. They’re not loyal. They don’t referral other profitable new customers and clients. They are often demanding and difficult to serve customers and clients who you don’t want. Learn how to acquire new customers who will be profitable and pleasant to serve long-term.
Trigger Events in Marketing indicate that someone may be ready to buy. Certain events, milestones, or seasonal activities may indicate that people are ready to buy. Identifying these “triggers” and reaching out to customers at the right time with the right message is a great way to attract new customers.
How to Control Costs for Generating Leads and New Business
Can some prospects be handled by instant chat, phone support reps or replying via email? Can marketing help with “lead nurturing” information to educate a prospective customer? Content marketing is using content (reports, white papers, articles, eBooks) to help educate a prospective customer. Then the sales team is engaged when the person is further along in the process. That’s a win-win for the prospect and the company. Sales people are using their time then to deal with real “qualified” (educated) leads who are serious about buying.
This guide may be helpful:
Lead Nurturing Best Practices – How marketing and sales work together to give prospects the information they need at the right time to accelerate the purchase decision process.
TIP: Think of how banks work with ATM machines. Many people prefer to use the ATM for certain tasks and the banks have invested a lot of money to make ATMs excellent at certain tasks so that fewer people need to go inside the bank to deal with a teller or bank manager. The banks have essentially “triaged” customers and trained them to use the ATM for transactional, routine purposes and to come inside to talk to the people for more high-value or unusual tasks like setting up a new account. This is an excellent example of a win-win for the customer and the company (the bank). How can you apply this idea to your business? What can be automated and handled online or through a less expensive manner while improving customer satisfaction?
How to qualify leads
Who is a prospect? What makes for a qualified lead or prospect for your business?
If you asked everyone in your company that same question, you’d probably get just as many different answers as people you asked.
Everyone in the company needs to have the same definition of what your business considers to be a qualified prospect.
You will save money by focusing your marketing on attracting qualified leads that convert into profitable new customers. You will not be spending time and money on sales and marketing to people who won’t or can’t buy. This focus on qualified leads, allows you to target and nurture your most promising leads which will likely boost your sales and profitability.
Many companies like to use this system to qualify leads: “BANT” which stands for Budget, Authority, Need and Timeframe
1. Budget. Does the lead actually have the budget for your product or service? If not, they’re a suspect. You just need to know if you’re in the same ballpark. If they haven’t established a budget yet, they may be early in the sales process and need information on typical cost ranges. Be the one to educate them through offering white papers, reports and pricing information that is relevant to people new to the category (not experienced buyers or people further down the purchase process who are shopping for the best price.)
2. Authority. Ideally, the person you’re selling to should be the decision-maker and have the ability to authorize the purchase. Unfortunately, when you work with larger companies, this person usually isn’t brought in on the process until the very end, and you’ll have to spend your time nurturing the sale with lower-level employees. The sooner you can actually get in front of the real decision-maker, the better you can qualify a lead. For consumers, it may be you are talking to the decision-maker (or one of them.) For some purchases, research is now uncovering that everyone in the family may have a say (like where to go on vacation and what type of car to buy.)
3. Need. You may perceive that a buyer has a need for your product or service, but it doesn’t really matter unless they perceive the need, too.
4. Timeframe. What’s their sense of urgency? Is the person looking to buy today? Next week? Next month? Or next year?
You may want to classify or value different leads. Some companies use a numerical score to determine the value of the lead. A simpler method may be to just assign people into these four groups:
- Hot. These are prospects who have been qualified using the BANT system and are ready to buy quickly.
- Long-term nurturing needed. These are prospects who have been qualified and may be making a major purchase and are going to go through a more thorough selection process.
- Possible prospects. These may be people who have the potential to be prospects but don’t meet all the BANT criteria now. The sales people should not be interacting with these people. The people’s names should be added to the customer database and noted as “potential prospects” for marketing to deal with. A customer contact plan should be developed for this specific segment of people.
- Do not invest in. These are people who are determined to be “tire kickers” who won’t buy. Get them out of your customer database or flag them so you do not invest any money mailing them anything.
Here’s a simple example of how to pre-qualify leads. You have a vacation home you rent. You run an ad one month without listing the rental price and you get a lot of calls and emails. But when you tell people what the place rents for, the majority of people aren’t interested any longer. The next month you run the exact same ad with this exception: You include the weekly rental price. You get far fewer calls but all those people are “pre-qualified”. Now you are checking availability and selling them on why to rent your place. You’ve saved yourself a lot of time and hassle answering calls from “tire kickers.” This same principle is what lead qualification is about for businesses selling to consumers or to other businesses. If you don’t include your prices (or price ranges) you are going to be doing a time-consuming “dance” with suspects to determine if they are “prospects.”
How to Identify Your Most Profitable Customers (so you can clone them)