Lead Generation: Best Practices, Processes, and Technologies

Lead generation is the process of attracting and converting prospects into individuals or organizations that have expressed interest in your company’s product or service. It often involves collecting potential customer information, such as name, contact details, or other relevant data. These leads are then nurtured through marketing and sales efforts with the goal of converting them into paying customers.

Lead Generation Statistics

Here are some key lead generation statistics gathered by Ruler Analytics:

• 91% of marketers say that lead generation is their most important goal​.
• 53% of marketers spend at least half of their budget on lead generation, while only 34% spend less than half of their budget on it​.
• 80% of marketers believe that marketing automation generates more leads. In fact, marketers who use automation drive as much as 451% more leads than those who don’t use automation. Additionally, 77% of marketers using automation software convert more leads than those who don’t use an automation tool​.
• 84% of marketers use form submissions to generate leads, but 36% of marketers who use form submissions as a conversion tool struggle to track them​.
• 50% of marketers use phone calls as a conversion tool to drive leads, but 62% of those struggle to track them​.
• 33% of marketers use live chat as a conversion tool, but 53% of marketers using the conversation tool struggle to track it.
• 95% of marketers believe they know which channel generates the most leads for their business​.
• 27% of marketers stated that organic search generated the most leads for their business​.

Lead Generation Terminology

If you’re new to understanding lead generation, there are some common terms that you should understand:

• Lead: A lead is an individual or organization that has expressed interest in your product or service.
• Marketing Qualified Lead (MQL): A lead identified as more likely to become a customer than other leads. This is based on lead intelligence and is usually determined by the marketing team.
• Sales Qualified Lead (SQL): A lead vetted by both the marketing and sales teams and is deemed ready for the next step in the sales process.
• Product Qualified Lead (PQL): A lead who has used your product (often through a free trial or freemium model) and has demonstrated a high likelihood of becoming a paying customer.
• Service Qualified Lead (SQL) A lead who, through engagement with a company’s service or support team, shows readiness to upgrade to a paid service. This concept is often found in businesses offering a free or freemium model, where such interactions indicate an interest in premium offerings.
• Cold, Warm, and Hot Leads: These terms refer to where the lead is in the buying process. Cold leads have shown some interest but are not actively looking to purchase. Warm leads are actively looking and may have responded to marketing efforts. Hot leads are ready to purchase.
• Lead Scoring: This methodology ranks leads according to their sales readiness. Scores are based on their interest in your business, their current place in the buying cycle, and their fit with your business.
• Lead Nurturing: The process of developing relationships with buyers at every stage of the sales funnel. It focuses on listening to prospects’ needs and providing the necessary information and answers.
• Conversion: In the context of lead generation, a conversion occurs when a visitor to your website completes a desired goal, such as filling out a form or purchasing.

The Buyers Journey And Lead Generation

The buyer’s journey is the process a potential customer goes through, from first learning about a product or service to making a purchase. While the specifics can vary greatly depending on the company and the product or service, a typical buyer journey might look something like this:

1. Awareness Stage: The potential customer first becomes aware of your product or service, typically through marketing efforts. They identify they have a problem or a need and begin searching for solutions.
2. Consideration Stage: The potential customer starts researching and comparing different solutions to their problem. They read reviews, check out competitors, or download more information. At this stage, marketing efforts aim to provide helpful, engaging content that positions your product or service as a compelling solution.
3. Validation Stage: After the potential customer has narrowed their options, they move into the validation stage. They further scrutinize the options by looking at each company’s qualifications and reputation. They build a list of requirements that the solution must meet. In response, businesses often tailor their proposals to fit these specific requirements, demonstrating how their solution best fits. MQLs convert to SQLs at this stage as sales teams become more involved, helping to validate the value proposition of the product or service.
4. Consensus Stage: At this point, the lead may need approval from other organizational stakeholders or partners. This may involve presenting the proposal to a team or management and getting a consensus on the proposal, budget, execution, and timeline. The sales representative often needs to provide additional information or resources to help the internal representative sell the solution and the vendor internally.
5. Decision Stage: The potential customer is ready to decide once a consensus is reached. There may be some negotiation on budget, timeline, deliverables, and contracts but it’s typically known to the sales team whether or not the lead will convert at this point.
6. Conversion Stage: This is where the potential customer becomes an actual customer. The sales team works to close the deal, providing any additional information or reassurance the customer needs to finalize their decision.
7. Retention Stage: After the purchase, the customer enters the retention stage. Here, both marketing and sales can play a role in encouraging repeat business and fostering customer loyalty.
8. Advocacy Stage: Ideally, your customers advocate for your brand, providing positive reviews, testimonials, or referrals. This can be encouraged by providing excellent ongoing service and creating opportunities for customers to share their experiences.

Remember that the buyer’s journey isn’t always a linear process. Customers may move back and forth between stages before making a decision. Additionally, the specifics of the hand-off from marketing to sales may vary based on your company’s processes and the nature of your product or service.

Measuring The Performance of Your Lead Generation Strategy

Key performance indicators (KPIs) help businesses measure the effectiveness of their lead generation strategies. Some of the most common lead generation KPIs, which align with various stages of the buyer’s journey, include:

• Lead Quantity: This is the total number of leads generated over a specific period. It’s often the first metric companies monitor to ensure their marketing efforts are bringing in a steady flow of leads.
• Lead Quality: This evaluates how likely a lead will become a paying customer. High-quality leads are more likely to convert, making them more valuable to the business.
• Conversion Rate: The percentage of leads that complete a desired action—like filling out a form, subscribing to a newsletter, or making a purchase—out of the total number of leads. This KPI is crucial for understanding how effectively your business moves leads through the buyer’s journey.
• Time to Conversion: This measures the average time it takes for a lead to convert into a customer after first interacting with your brand. It’s essential for understanding the length of your sales cycle.
• Cost per Lead (CPL): The money spent to acquire a single lead. It helps businesses understand how cost-effective their lead generation strategies are.
• Number of MQLs: This KPI tracks leads engaged with your marketing efforts but are not yet ready to receive a sales call. They’re typically at the awareness or consideration stage of the buyer’s journey.
• Number of SQLs: These are leads deemed ready for direct sales follow-up, usually at the decision stage of the buyer’s journey.
• MQL to SQL Conversion Rate: This measures the percentage of MQLs that become SQLs. It helps assess the effectiveness of your marketing, lead nurturing, and qualification process.
• Sales Conversion Rate: This is the percentage of SQLs that make a purchase. It directly reflects the efficiency of your sales team in closing deals.
• Return on Investment (ROI): This is the ultimate measure of the effectiveness of your lead generation efforts. It compares the financial benefits of your lead generation campaigns against the costs invested in them.

When monitored and analyzed over time, these KPIs can provide crucial insights into the effectiveness of a company’s lead generation strategy and help inform strategic adjustments in it.

Lead Generation Strategies

Lead generation is a collaborative effort where marketing and sales collaborate and coordinate to move prospects through the buying journey. Inside and outside sales each have unique lead generation strategies due to the differences in how they engage with customers. Companies often have an inside sales team, outside sales team, or both… to accept the leads from marketing and move through the sales cycle.

Incorporating both inside and outside sales strategies can produce amazing results.

Lead Generation Technologies

In today’s digital age, not utilizing technology in the lead generation process could disadvantage a business significantly. Technology plays a crucial role in every step of modern lead generation, from identifying potential leads and capturing their information to nurturing those leads and analyzing results. Here are the benefits of incorporating technology in the lead generation process:

1. Scalability: Manual processes can limit the number of leads a business can handle effectively. Technology allows businesses to scale their lead generation efforts, reaching a larger audience and managing more leads manually than possible.
2. Efficiency and Automation: With technology, businesses can automate many aspects of the lead generation process, such as email marketing, social media posting, follow-ups, self-service, and even contract preparation and execution. This automation increases efficiency and frees up time for staff to focus on higher-level tasks.
3. Data Collection and Lead Intelligence: Technology tools can automatically collect and analyze data from lead generation efforts. This includes information about where leads come from, how they interact with the business, and which marketing efforts are most effective. Lead Intelligence, often enhanced with purchased data, provides deeper insights about potential customers. This information can be used to score, prioritize, and provide sales representatives with valuable insights to personalize their approach and sell more effectively and efficiently to the client.
4. Personalization: Modern customers expect personalized experiences. Technology can help provide this personalization at scale, using data about each lead to tailor communications and offers to their needs and interests.
5. Multichannel Engagement: Today’s customers engage with businesses across various channels, from email and social media to websites and mobile apps. Technology is necessary to manage and optimize these multichannel interactions.
6. Tracking and Nurturing Leads: Technology, specifically CRM systems, helps track a lead’s journey from the first point of contact until conversion (and beyond). It aids in lead nurturing, ensuring no potential customer falls through the cracks.
7. Improved Communication: Technology tools can facilitate better team communication, making it easier to collaborate, share information about leads, and coordinate efforts.

How Is AI Transforming Lead Generation?

Artificial Intelligence (AI) is revolutionizing the lead generation process in several significant ways, making it more efficient, targeted, automated, and successful. Here’s how:

1. Predictive Analytics: AI can analyze vast amounts of data to identify patterns and predict future outcomes. This can help businesses forecast which leads are most likely to convert, enabling them to prioritize their efforts more effectively.
2. Personalization: AI can use data about a lead’s behaviors and preferences to create highly personalized marketing messages. This level of personalization can significantly improve engagement and conversion rates.
3. Chatbots and Virtual Assistants: AI-powered chatbots can engage with potential customers 24/7, answering questions, providing information, and even qualifying leads. These tools can enhance customer service and free human employees for more complex tasks.
4. Automated Email Campaigns: AI can help automate email marketing campaigns, sending personalized emails at the optimal time to engage each lead. It can also analyze the success of these campaigns, identifying which messages are most effective.
5. Targeted Advertising: AI can analyze data from various sources to create highly targeted advertising campaigns. These can reach potential customers on the platforms they use most, with the messages most likely to resonate with them.
6. Lead Scoring: AI can help businesses score more accurately using various data points. This can help sales teams focus on the leads most likely to convert.
7. Social Listening: AI can monitor social media platforms for mentions of a brand or relevant keywords, helping businesses identify potential leads who may not be on their radar yet.
8. Content Creation and Optimization: AI can also aid in creating and optimizing content. It can analyze which types of content drive the most engagement, recommend keywords for SEO, and even generate content drafts.
9. Sales Forecasting: AI can analyze historical sales data and external factors to predict future sales trends, helping businesses strategize more effectively.
10. Process Automation: AI can automate various aspects of the lead generation process, from initial outreach to follow-up communications. This can help businesses streamline their lead generation efforts and ensure no potential leads fall through the cracks.

By leveraging AI in these ways, businesses can significantly enhance their lead generation processes, making them more efficient, personalized, and successful.