Every business needs a loyal and growing customer base to thrive, no matter what industry or scale of operation. How can marketers grow their customer base? By identifying leads and by generating leads. Lead generation is the best way for markets to find, attract and convert potential clients into long-lasting, loyal customers.
Lead generation is a hugely valuable practice for marketers, but it is still a tough and difficult technique to master. It is not uncommon for businesses to waste a significant amount of time and resources on lead generation. This guide is here to help you learn more about lead generation and its challenges, to help you avoid common pitfalls, and start generating high-quality leads.
What is Lead Generation?
Before answering the question “what is lead generation”, another question must be answered: what is a lead? A lead is a person who has an expressed interest in a company’s product or service. Although a lead is not a client yet, they are someone with the potential to become a client. The quality of a lead can vary depending on incentives, contact information accuracy, and a few other features.
So, now that you understand what a lead is, we can start to answer the question: “what is lead generation?” Lead generation is about reaching a potential customer early in their buying journey, cultivating a relationship, and building trust right up until the point of purchase. Lead generation is about more than motivating a potential client to make a purchase; it is about forming a long-last relationship with a prospect.
The Different Types of Leads
Of course, every lead that comes to you will be different and individual. However, to make the lead generation process easier, marketers have a breakdown of different leads. Understanding the different types of leads makes it easier to identify and appropriately respond during lead generation.
A suspect has shown interest in your company, products, or services in some way, such as by visiting your website.
- Cold, Warm, and Hot Leads
The terms cold, warm, and hot are used to describe the level of interest a lead has in a product or service. A hot lead is a person who might have inquired about the pricing or availability of a product. A warm lead might be an individual who has expressed a need for a product but no specific interest in your companies offering.
- Market Qualified Leads
This type of lead has an expressed interest in a product or service but has not given any indication that they intend to make a purchase in the foreseeable future. While this lead is not interested in buying immediately, they very much might be at some point.
- Sale Qualified Leads
This type of lead has expressed interest in buying a product or service at the point of contact. A sales qualified lead can is ready to be converted into a customer. The aim is to try to convert as many leads as possible into a sales qualified lead.
- Unqualified Leads
Also known as a dead lead, this person does not have any interest in what your business has to offer.
What are The Challenges to Lead Generation?
Every sales team should be working towards increasing the number of sales qualified leads they are working with. However, while lead generation can seem pretty straightforward in theory, it can become a lot more challenging in practice. The points below outline some of the main challenges for business lead generation.
What are Most Common Lead Generation Challenges?
Some of the most commonly reported challenges of lead generation by marketing and sales teams include:
- Generating enough leads
- Lack of resources
- Slow-moving leads
- Low lead conversion rates
The challenges of lead generation can differ greatly from industry to industry. For example, e-commerce brands-and-brick and mortar retailers make their money from loyal and returning customers. This differs from contractors and construction companies, who deal more in large, one-off projects. Getting contractor leads are therefore more important and scarcer. Industry-specific challenges like this are being reduced as lead generation websites are starting to focus more on leads for specifically challenging industries like construction.
Identifying High-Quality Leads
A universal challenge to lead generation is identifying high-quality leads. This problem is common in industries that have no problem with the number of leads available. For businesses to combat the quality of lead generation’s quality, they need to focus on two aspects, targeting and lead ranking. You need to make sure that you are targeting leads that most closely align with your business. Targeting the right leads enables you to be confident in the fact that the leads you are nurturing are, at least, market qualified. Your team also needs to spend time ranking your leads in terms of cold, warm and hot, prioritizing resources, and more appropriately and efficiently moving customers up sales channels.
Knowing Your Audience
Not having a clear and deep understanding of who your target audience is one of the biggest challenges to lead generation. If you don’t know your target audience, you are likely to be spending your time chasing irrelevant leads who are unlikely to reach the point of purchase.
To understand more about types of leads, you should look at your current customer data. Customer analytics provide useful information about customer demographics and behaviors that you can use to identify hot sales qualified and other hot leads in the future.
Time and Resources
The time and resources needed for lead generation can present a real challenge to some companies, especially as there is often a delay between lead generation and sales. Implementing lead generation into your digital marketing strategy is one of the best ways to see lead generation as an investment. Using digital marketing practices like SEO enables you to grow your customer base organically. Other digital marketing techniques, like paid search, paid per click advertisements, and social media campaigns, also help you to make your brand more visible to potential leads.