By Blake Vernon on Jul 30, 2020 3:25:43 PM
This article was originally published on Business.com on December 12, 2019.
Learn which metric you need to focus on to create a winning lead generation strategy.
- A solid lead generation strategy is crucial for growth, but about 53% of companies admit that lead conversion is slow for them.
- Sales teams can improve their strategies by recognizing that leads gained from inbound marketing and outbound marketing efforts convert differently.
- If a business considers conversion rates and ROI together, then it can more accurately project its returns and optimize its lead generation techniques.
- When evaluating lead generation efforts, a key metric to track is the cost per qualified sales opportunity rather than cost per lead.
High-quality leads drive every successful business, so a solid lead generation strategy is crucial to any company's growth. But many companies fail to find a winning formula because they focus on the wrong metrics. When choosing a lead generation strategy, it's important to consider all the factors – including sales cycles and conversion rates – that determine exactly how much money to invest upfront and when to expect a return on that investment.
About 53% of companies admit that lead conversion is a slow process. If you can generate more qualified leads from the start, then it'll be easier to grow your company. Sales teams can improve their strategic efforts by recognizing that leads gained from inbound marketing efforts often convert differently from leads gained via outbound marketing.
For instance, employing email marketing tactics can make your company more familiar with possible leads. Research shows that 90% of customers searching for products online haven't decided how they feel about brands. Email marketing tactics will make it more likely for a lead to select your business over other unfamiliar businesses. Lead conversion may take longer in this case, but the ROI will be strong given the low initial costs.
It may seem daunting to invest in a strategy in which leads may or may not enter the sales process. However, if a business considers conversion rates and ROI together, then it can more accurately project its returns and optimize its lead generation techniques accordingly.
Tracking the right lead generation data
When measuring different lead generation techniques, businesses tend to track the wrong data to gauge performance. For instance, they may focus too heavily on front-end metrics (such as number of meetings) or on back-end data points (such as number of closed deals). While both front- and back-end metrics are important to track and understand, they aren't the true indicators of success for lead generation efforts.
Unfortunately, many marketers still mistake them for signs of success. Even though 80% of marketers claim that their efforts are driven mainly by data, they often fail to use the right data when evaluating performance. Following the wrong data can make it difficult to truly evaluate the effectiveness of a lead gen strategy.
For example, judging lead gen's effectiveness solely by the number of meetings a campaign secures means missing out on a key measurement of those meetings: quality. Look at it this way: Let's say that a company pays 100 people $20 each to show up for a meeting, thus generating 100 leads. While $20 is a great cost per lead, how many of those 100 people actually fit the company's customer profile and demonstrate interest in its service or offering? In other words, how many qualified leads has it attracted, and how has that changed the ROI on the $2,000 it spent?
On the other hand, evaluating lead generation efforts solely by the number of closed deals ignores a key metric within the sales process. Closing one deal out of 100 meetings might seem like a poor result of a lead generation strategy, but what if those meetings actually generated 50 opportunities? If only one in every 50 opportunities ends up closing, then the problem is more likely in the sales process.
Techniques for Optimal Lead Generation
The lead generation process starts with the creation of a lead and ends when that lead converts into an opportunity and enters the sales process.
Therefore, when evaluating lead generation efforts, a key metric to track is the cost per qualified sales opportunity rather than cost per lead.
Does your organization need to revamp its lead generation strategy? Consider including these four elements in your new campaign:
1. Utilize traditional email marketing.
Email marketing is one of the oldest forms of online marketing. That said, it remains one of the most common and profitable lead generation tactics – and that's because it works. Emails can generate an average of 122% ROI, or more than four times what other digital channels typically generate, according to digital marketing surveys.
While that return on investment is incredible, it isn't the only benefit to utilizing email marketing tactics for lead generation. Email marketing also allows the use of advanced analytics to accurately track how many recipients click through to the website directly from their inboxes and make purchases. Statistics show that for every dollar spent on email marketing, companies make $38 on average from purchases. Even those who don't purchase will be more likely to visit your website, boosting your traffic with leads who you know are already qualified and interested.
2. Rely on effective phone calls.
The cold calling strategy is similar to email marketing in that it can be discounted as more of a traditional approach when compared with digital marketing technologies. While businesses can't rely solely on telemarketing, cold calls are still highly effective.
The key is integrating phone calls with other strategies, as research shows they can have lead generation success rates of up to 90% when integrated with emails, social media and other channels. For example, interacting with your audience on social media can help you glean information about what talking points will appeal to them most. Telemarketing can be a larger investment, so having email communication already established will cut down on call times and make it more profitable for lead generation.
3. Connect with your audience on social media.
Emails and phone calls to leads are valuable in part because they are so personal. But these days, connecting with leads on various social media platforms offers just as much opportunity for personal connection, and on a broader scale. It's also highly cost-effective: Companies surveyed report that using social media has helped them reduce marketing costs by as much as 45%.
Utilize the most popular platforms your audience visits, such as Facebook and Instagram, to build a social media presence around the interests and concerns that matter to your customer profiles or buyer personas. Social media is also a great way to implement retargeting strategies to stoke interest in leads who have visited your website or signed up for email blasts, all at a minimal cost.
4. Organize networking events for personal interaction.
Integrating lead generation strategies across email, phone calls and social media creates an overall customer experience with a sum that is greater than its parts. However, not all of your lead generation techniques should occur from behind a desk or a screen. In fact, more than 52% of business leaders in a Harvard Business Review survey say events drive most of their marketing ROI.
Organize live events like networking opportunities or product activations to attract highly qualified leads. This allows leads to interact with your business personally and gives them memorable experiences that they'll always associate with your brand. Every event and interaction also fuels the phone calls, emails, and social media conversations that turn your qualified leads into valued clients.
Along with following the wrong metrics, focusing on only one lead generation strategy at the expense of others is another common mistake that businesses tend to make. Leads are everywhere, and to gain their interest, you'll have to meet them in as many places as possible. Combine your email, cold calling, social media and event marketing strategies to generate the highest number of qualified leads and then track how many of them convert into opportunities.