What is lead generation?
A lead generation company’s guide to qualifying leads
Over at Win At LinkedIn, we are a dedicated outbound lead generation company that has generated over 30,000 qualified leads for our B2B clients.
In some circles, the above statement would be simple to understand. But for others, the words “outbound”, “lead generation”, “qualified leads” and “B2B” are quite alien concepts!
Below is a primer for those of you who are either learning what is lead generation, or want to learn how to do it well.
What is lead generation?
Lead generation (also referred to colloquially as lead-gen) is the process of driving and capturing interest in a product or service with the purpose of driving sales. A lead by itself is a potential client who is qualified and interested in your product or service and is what we call sales ready, that is ready to start being sold into a product or service.
Lead generation as a sales process has changed drastically over the years. It’s now common for multiple marketing/sales channels to be used to create/capture leads. These most popular channels for lead gen include telephone, direct e-mail, PPC and display advertising. (In my case, Win At LinkedIn is a LinkedIn lead generation company — we leverage the world’s largest business social network and connect our B2B clients to interested buyers on the LinkedIn network).
How lead generation works
Overall lead generation activities can be classed into two distinct groups, inbound and outbound.
Inbound
Generating inbound leads involves creating a range of information, assets, and incentives that prospects can follow towards a company, product or service. For example, this page you’re currently on would be classed as an inbound lead generation technique, the page uses detailed information around our service to draw in prospects (you) through Google search.
Outbound
The generation of outbound leads is all about directly contacting your target prospect group with a message promoting your company, service, or product through various channels. For example, direct email campaigns target and reach highly curated prospects with a custom message about a service or product.
Inbound vs Outbound
Inbound is a very tried and tested way of generating leads for your business but in recent years the results of this type of inbound activity have been diminishing whilst costs increase. With inbound there’s no extensive way to really qualify who is clicking your advert, content, or asset until they become a lead. This creates massive problems as the lead may not be right for the product or service, they may not have the necessary budget and they may not even be that interested so your sales team loses time on leads that will never close.
Outbound lead generation is the opposite of this when done well. It’s pinpoint in targeting and qualifying prospects before and after contact, ensuring your sales funnel is filled with highly closable prospects, the only problem is the data collection required to do great and personalised outbound activities is significant. Overall lead generation is typically pursued across both inbound and outbound channels for most successful campaigns.
What are Qualified leads?
Marketing is all about leads — either generating them from a standing start when your business has no brand awareness or ensuring that there is a steady stream of them once you are up and running.
In lead generation, leads are companies who have expressed interest in your specific offering (product or service). Qualified leads also have expressed interest but also meet certain criteria set by you to gauge their level of interest and ability to purchase your product or service. Qualifying leads is a great way to understand the value in your sales pipeline at any one point and make sure your sales team is focused on closing high-value leads.
Types of lead qualification
Typically when dealing with lead generation there are two major types of leads.
What is a marketing qualified lead (MQL)?
Can be defined as a prospect who has expressed interest in a product or service provided by your company and meets certain loose criteria set out by previous customer data to ensure quality, i.e., finances, company size, need for product
What is a sales qualified lead (SQL)?
Can be mostly defined as a prospect who is ready to buy and in the buying process. This type of lead is the most valuable in any sales pipeline and is a company who are far along in the buying process.
How do you qualify a lead?
There are several ways in which you can qualify leads.
Relevance to the product
It’s critical the company is relevant to your product, meaning that they have a need or could use your product and it would provide them with enough value to consider purchasing.
Point of entry
You need the right entry point to a targeted company, either a decision maker or someone who has the appropriate authority/access/influence to decision makers who can make a purchasing decision. For example, there’s no point of contacting and engaging with an executive that lacks the authority to make a purchase or to introduce the offer to a more senior member who can take it forward.
Financial ability
Often overlooked, where data is available it’s important to determine if a prospect can afford your product or service. Otherwise, it’s a wasted conversation as they will never close.
Propensity to buy
Is the prospect genuinely interested in understanding more with the intent of making a purchase or are they just curious? There’s a huge difference.
Qualifying factors are heavily dependent on your company and the product/service; there could be many more factors added in, depending on the data available. Overall qualified leads are critical to a success lead generation and overall sales process.
A step further with BANT Qualification
Originally developed by IBM, BANT Qualification was invented as a framework to identify sales opportunities and rank them. BANT stands for:
Budget
What’s the prospect’s budget and is it sufficient to buy your product or service?
Authority
Does the prospect have the authority to make a purchase decision or the relative influence to a decision maker?
Need
What level of need does the prospect have for your service or product?
Timeframe
What timeline does the prospect have for buying/implementing your product or service?
Common sense should always be applied to lead qualification
BANT is a good dose of common sense put into a framework; it’s a great and easy way to define leads and ascertain lead quality. Although there are some issues with BANT that should be acknowledged: Budgets are sometimes hard to ascertain, and traditional budgeting alignment has changed over the years.
- Budgets are sometimes hard to ascertain, and traditional budgeting alignment has changed over the years.
- When dealing with a major purchase choice, several decision makers will be involved.
- In some cases, it may be quite difficult to ascertain what is a need and what is a want.
- Timeframe-wise things change fast in a company, and you’re reliant on your customer’s planning accuracy and honesty.
Overall, BANT is extremely useful for providing a basic framework for sales qualification, but you should always endeavour to adapt a BANT framework to your sales department’s needs with a little flexibility.
Sales funnel: 4 stages from lead to customer
The sales funnel can be defined as the buying process that companies guide customers through when they purchase a product or service.It’s critical that the sales funnel and lead generation activities are perfectly aligned, this ensures a smooth buying journey for the prospect, maximising conversion and minimising any loss of sales and time.
Stages of the sales funnel
The stages of a sales funnel can be different depending on the product/service or structure of the company but generally speaking, they’ll follow this formula:
Stage 1. Prospecting for leads
This first stage is about identifying, reaching, and qualifying the right potential client and opportunities for your business. It is critical to the whole process because the quality of leads that enter the funnel will affect and define the whole sales process in terms of conversion, results and revenue. You’re going to need good customer relationship management software to track prospects at this stage.
Stage 2. Cultivating a relationship
At this stage referred leads who are qualified and interested in your product or service are passed to the sales team. It’s now all about scheduling initial meetings, building a relationship between the lead and the sales team, whilst identifying their exact needs and requirements in relation to your product or service.
Stage 3. Demonstrating value
At this stage the sales team is demonstrating the value of the product/service to a lead based on their needs and requirements which were identified during the cultivation stage. It’s critical at this stage that the sales team has a clear understanding of the customer. This stage is often where many leads are lost and we find there is the most room for optimisation.
Stage 4. Closing a sale
This stage is all about delivering a proposal and closing the client. If the whole process has been done correctly, there should be no reason for the prospect to stray away at this point and you should be near the end of the road in closing a sale.
Hopefully, the above has been a helpful primer on what exactly “lead generation” is, and why it is so important for your business. Get in touch with me if you’d like a professional business generating leads for your company.
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