Lead Generation

The term lead generation describes the process of customer acquisition and the measures that lead potential customers to show an interest in a product or service. A lead is considered to be a data record which the interested party makes available to the company on a voluntary basis. Lead generation can be part of B2C and B2B marketing. However, it is not limited to individual methods or strategies.

Acquiring new customers comprises very different approaches and practices, which can be categorized according to the media being used, pull and push principles, or the focus on quantity or quality. They can be grouped as lead management.

General information

Dialog marketing is the classic approach in lead generation. Customers are contacted by various means to elicit a response, for example, in the form of an order with which the customer also provides his contact data for further use.

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Changes through e-commerce

The development of e-commerce has changed the possibilities of lead generation. The potential customer can still be approached directly, but an increasing number of attempts are being made to gain prospective customers through indirect methods. Inbound marketing and permission marketing are prime examples of this.

Objective of lead generation

The aim of lead generation is not simply to gain a lead in the form of a data record, such as in a sweepstake. The actual goal is to gain a new customer who is interested in product X or service Y and is “sales-ready.” This is a qualified prospective buyer, who will most likely become a new customer because he has a specific motivation and does not want to win anything.

Types of lead generation

A lead is determined by the strategic orientation of a campaign.

  • Is the aim to generate a high number of leads, or should only certain leads be generated (quantity versus quality)?
  • Through which channels does the company receive the leads it is seeking (decision about medium / channel)?
  • How is the campaign set up and implemented (push versus pull)?

These questions should be answered before lead generation is started as this can save the company resources. The answers to these questions are, in most cases, dependent on the type of industry and companies.

Basic types of lead generation are as follows:

  • Outdoor: Trade fairs, promotions, raffles or collaborations at events can generate leads
  • Phone: Call centers can receive inbound calls and interest prospective customers in a specific topic. Outbound calls are also possible. Please note, however, the legal regulations for cold calls.
  • Online: websites, emails, newsletters, whitepapers, webinars, landing pages, social media, blogs, downloads or online magazines can create leads. Search engine optimization and search engine marketing can also support the acquisition of new customers. The possibilities on the Internet are extremely diverse.
  • Print: Ads in magazines with discount coupons or direct advertising letters with response letters can generate leads.

Incentives are used in many types of lead generation in order to motivate potential prospects. These may be special offers, discounts or free trials. Legal aspects must also be observed for some types of lead generation. For example, there must be an opt-out option for newsletters, and transfer of data in a web form must have a opt-in-button. The customer must explicitly express their consent with special lead types before a data record can be generated by the company. A double opt-in is the usual procedure.

Advantages / disadvantages

Electronic lead generation methods have the advantage that the leads are already in the form of records after they are generated. Web forms, registrations for newsletters or webinars already contain the leads in a certain format and can be easily saved. Lead reporting is much more complex with offline media. This also affects the segmentation of leads. The more complex the datasets, the more difficult it is to evaluate them and assign them to the correct sales method. Scatter losses can result.

Lead generation in on-line media seems to be far more practical, but it also involves resources. Lead scoring is paramount for leads generated from online and offline media. Thus, according to certain criteria, leads are divided into good and less good contacts. The more data that is available, the easier the scoring will be. Leads can also often be purchased. This procedure is only legally permissible if the prospects have clearly given their consent for the use their data by third parties. The concept of the company passing on leads may nevertheless have negative effects on the image of the company. This is the case, for example, if users receive newsletters for which they did not originally sign up directly.

Since leads are qualified prospects, companies can use the right strategy to achieve a high degree of recognition in certain target groups and secure market shares in their industry. Topic-relevant affinity of the interested parties is recommended. A certain rhythm of campaigns should be considered. A campaign that is within the legal framework but involves frequent emails could harass potential customers and thus have a negative effect.

Lead generation can have its limits. For example, sweepstates and competitions could provide many leads, but many users may have only participated because they wanted to win an attractive prize, and were otherwise not interested in the company, its products or its services. For this reason, prizes for lead generation with sweepstakes should be as relevant as possible to what the company offers.

Relevance for online marketing

Lead generation plays a central role in online marketing. Methods such as content marketing, permission marketing, or inbound marketing are all aimed at generating leads and marketing products, services, or their own image. Search engine advertising can also be implemented for lead generation. The more leads a company generates, the greater the reach for future campaigns and possibly revenue, if the leads convert into sales. The success of lead generation can be measured using different characteristic values. ROI, social return on investment and conversion rate are mentioned here. Monitoring is recommended to react quickly and optimize later campaigns.

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