Marketing is awash with jargon and terms used interchangeably. Our goal with this article is to clarify some of those grey areas. We’ll look at some key questions such as: what is lead generation? What’s the difference between demand generation and lead generation? Where does lead generation fit in the marketing funnel? What about lead generation versus nurturing? And what about measuring lead generation – what key metrics should you be tracking? What are some core lead generation processes, tactics and tools?
Lead generation versus demand generation
The goal of marketing is to stimulate interest in and create business for a brand or organisation.
The funnel is a useful model here. It’s not perfect but it helps us understand the customer journey towards a purchase and the strategies and tactics we can use as marketers to make that journey a productive one for brands and buyers.
For brands, marketing ‘starts’ with demand generation: securing attention and building appeal broadly amongst core customer segments. This activity takes place at the top of the funnel – or the awareness stage. It is literally about encouraging demand for your product and service: brand and reputation building. It’s measured by things like traffic, search results, cost per click, audience growth etc.
Being famous is great, but as business performance metrics go, that can be vanity. Converting that awareness into sales, that is sanity.
We asked a senior marketeer client what their goal is.
They said: “What we care about – as a joint sales and marketing team – is pipeline. And building new pipelines… that’s the thing that keeps me awake at night: making sure we’ve got enough pipeline pouring in the top so that sales can hit their targets.” Senior VP of Global Marketing, US enterprise software firm.
Lead generation is about converting interest into action
Enter lead generation. It’s a subset of demand generation: it is still about creating demand, but in lead generation there is now a mission to convert.
Lead generation is about taking that brand awareness and converting it into action:
– For a customer that action might be an initial engagement with a brand: following and liking its content, signing up to hear more. This is the acquisition stage of the funnel. It’s measured by things like traffic, mentions, cost of acquisition, open rate etc
– Or the customer might go straight to a business outcome – a sale or subscription. This is the activation stage of the funnel and essential metrics at this stage include: numbers of signups, completed onboarding processes, usages of the service etc
For fast moving B2C brands it can be a swift move from awareness to activation. For more complex or high value, and often B2B, sales the path from awareness to activation can be long and circuitous.
What are some key lead generation tools for inbound and outbound marketing?
Our approach to lead generation is customer-centric. It’s about attracting customers by developing content and experiences tailored to them.
A simple inbound lead generation approach is to create a piece of content called a ‘lead magnet’, which we offer to prospects to download as a tool to capture contact details and permission to market. This can be supported by digital advertising to put the content in front of new audiences.
Or we might use a tailored outbound approach, creating personalised campaigns that use content-pieces as hooks to move a relationship on, supporting social selling and account based marketing programmes.
Lead generation versus lead nurture
We know this when we look at different funnel shapes – the number of touchpoints it takes to convert and the length of time to convert vary significantly from industry to industry, between brands, categories, products, price points etc. Google recently did some research into this to understand better the complex decision making process that customers go through – or what it calls the “messy middle”.
This goes some way to explain why the funnel is not a perfect metaphor. But to continue with our model, for the purposes of this article, the next phase after generating a lead, is lead nurture.
Lead nurturing is the process of building and strengthening the relationship with a prospect. It’s about ensuring prospects have the information and engagement they need, appropriate to where they are in the purchase journey. The goal is to support and encourage leads from one funnel stage to the next, towards purchase.
Lead nurturing takes place through the acquisition and activation stages of the funnel (and arguably beyond, but that’s for another article). As such in addition to the metrics we’ve referred to already, we have a new set of KPIs to help us manage lead nurture.
As a prospect moves through the funnel we can build intel about how likely they are to convert. The more data we have on prospects, the better we are able to qualify or ‘score’ leads. Lead scoring models are built on a range of inputs such as customer demographics, firmographics, interaction and engagement information, plus sales and service data. The model defines what a ‘good lead’ looks like at different stages of the funnel and the data/activity that’s required from the customer to move from prospect to marketing qualified lead (MQL) to sales qualified lead (SQL).
Lead nurture tools
Retargeting or remarketing is a core lead nurture tactic – a performance marketing tool that allows us to remind customers of their activities on a website if they leave without purchasing/converting.
Email marketing is another great nurture tool. Once a customer signs up and gives permission to be marketed to, email is a useful way to keep in touch and stay front of mind.
Nurture tools need to be used intelligently to be effective. As a rule of thumb we recommend that the mission is to seek permission, be useful and add value – if you want to see conversion success.
Lead generation is all about the pipeline…
Back to our marketing VP: “The way it works is this, demand gen creates some awareness and we drive some leads. Then the sales development reps team call the leads trying to find projects. At that stage they’re converted to opportunities, and the sales team take those all the way through to closed won… And it works, we know the results we’re getting… because I’ve got my data scientists on board. I can track the results of a PPC ad all the way through to closed won. It’s not a perfect science, but it’s pretty close. And most people can’t do that… But it’s pipeline, that’s what keeps me awake at night.”
So to sum up, lead generation is the link between sales and marketing, the discipline that ensures the marketing team is focused on its contribution to the bottom line.
We can help you….
The F&G Funnel Mechanics lead generation service is about helping you identify and build relevant addressable audiences, nurture leads and deliver opportunities into your business. We’re not one-size-fits all. We start from insight – into what makes you unique, and which customers you uniquely serve. And we build creative content-led campaigns that fit with your business objectives. We’re technology and discipline agnostic, so we find the approach that’s right for you. With that foundation right, the drivers for successful lead generation are managed experimentation and regular, consistent effort to ensure your efforts are better targeted and the benefits grow over time.
We’ll help you grow your on-target prospect base and deliver more leads to your business with ongoing programmes that convert awareness to acquisition.
We’ve built content strategies founded on target customer insight and addressing core pain-points to fuel inbound and outbound marketing programmes for a range of clients. Helping them build valuable pipeline through many sectors including financial services, construction, media and FMCG.
To hear more, book an Ideas in Action webcall with us. It’s a short session of creative consultancy designed to inspire fresh thinking for your lead generation campaign. No charge, just free ideas. Drop us a line to get involved.
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