What Is Lead Generation?
Companies rely on leads to seek out potential customers. Leads are vital to the success of any company in the marketplace, especially in an online setting. If it wants to stay in business and prosper, a company must establish lead generation strategies that are cost-effective.
Lead generation is a marketing term for the process of generating consumer interest in a company’s products or services and collecting names and contact information. The primary purpose of generating leads is to build a list that salespeople can use to generate sales.
How Are Leads Generated?
Lead generation is nothing new. Traditionally, companies obtained leads at trade shows where they exhibited their wares in the hopes of attracting the attention of potential customers. Visitors at the company’s booth could leave a card filled out with their contact information. Later, the company’s salespeople would give them a call and hopefully make a sale.
Leads can also be obtained through referrals from existing customers, and through direct response to advertising. With the growing importance of the internet, many companies now use their websites to help generate leads.
According to many marketing experts, businesses should use a wide variety of lead generation techniques so that they always have a good number of leads.
Quality vs. Quantity
Generating leads is the initial step in the sales process. Businesses should aim for quantity and quality in their lead generation efforts. Quality leads are those that are more likely to be converted into sales. Keep in mind that not every lead can turn into a sale. There will always be bad leads; that is, people who do not end up buying the product for one reason or another. Keeping the number of bad leads to a minimum helps ensure that salespeople will be wasting less time while processing the list.
On the other hand, quantity also plays an important factor in lead generation, because even a potentially good lead won’t necessarily convert into a sale. Out of a hundred good leads, a salesperson might succeed in setting up 10 appointments. Of these, only 4 might make a purchase. Therefore, in order to meet a quota of forty sales monthly, a salesperson will need at least a thousand good leads every month.
Lead generation methods are often a trade-off between quantity and quality. A technique that generates high quality leads probably won’t generate a lot of leads. A good example is a form that visitors to a company’s website can fill in with their contact information to request a call back. Visitors requesting a call back are interested enough to want to know more about the product or service. They are also very likely to buy.
On the other hand, a newsletter subscription list provided by another company may generate numerous leads, but they are not likely to be as interested or qualified.
This is one reason why businesses should use many different methods of lead generation.
Finally, bear in mind that lead generation is only the first step. Companies should make every effort to handle and nurture these leads the right way in order to convert them into sales.