Lead Generation: What It Is, Why It's Important, and How to Start Right
Lead generation is a marketing process focused on gathering a pool of potential clients.
Leads represent individuals who have registered on a website, subscribed to an email newsletter, or performed other targeted actions.
After acquiring leads, segmentation is crucial; determining which are more promising is a priority, focusing first on the hot leads.
This article will explain what lead generation is and why it's essential, how to prepare for its launch, methods to gather leads and assess their quality, and also highlight the mistakes to avoid.
What is lead generation and why is it necessary
Lead generation involves gathering contact details about individuals who could potentially become clients and maintaining proper communication with them.
Attracting leads helps in collecting and managing a high-quality client base, where CPL and LTV are taken into account. This definition of lead generation emphasizes its benefits for companies, leading to increased sales.
Don't forget the balance between quantity and quality: it's better to gather fewer but targeted contacts than to have a large list of cold leads. How to prepare for lead generation launch: It's better to prepare in advance for lead generation by:
- Defining channels for obtaining leads. Consider traffic and expenses for each resource, such as push notifications, SMS, or email campaigns.
- Understanding utm tags. Determine what to include in source, medium, and campaign.
- Recording the lead source. Users might fill out forms offline, leave inquiries over the phone, or register on the website. It's essential to note this in the client's profile for effective communication.
- Developing a communication plan. If a lead registers but communication doesn't start, they might forget about your brand. Engaging cold leads becomes much more challenging.
- Identifying necessary integrations. Lead generation involves multiple services:
- From pop-up to email campaigns;
- Sending website data to an automation system;
- Client contacts flowing into CRM or from CRM to the automation platform.
Poorly set integrations risk data loss. It's also crucial to check all forms to ensure they work properly without conflicts with other site services.
- Choose a lead magnet. For instance, offer a guide or other valuable material to clients who register on the website.
How to collect leads
Now we'll tell you about lead generation methods. When lead generation combines both offline and online methods, it becomes even more complex. The key is not to confuse who engaged online/offline and to differentiate these concepts. Otherwise, customer data will be inaccurate, leading to incorrect lead cost calculations and LTV. In such cases, customer profiles/cards that identify the consumer and gather all their data in a unified system can be helpful.
Now, let's explain how to gather information about customers using online or offline methods.
Online
Embedded forms
These are forms that don't cover the website's content and can hide depending on the conditions you set. For instance, it could be a field for entering a promo code.
Example of an embedded form on Altcraft's website
Pop-up Forms
These are forms that appear on a website. It's crucial to experiment with different variations to find the pop-up that won't deter users and will attract the maximum number of leads.
Example of pop-up form with discount for subscription and date of birth
Pop-up windows come in several types:
- Standard pop-up: Appears based on certain conditions such as a visitor's first entry to the site or after viewing a specific number of pages, and so on.
- Linked pop-ups: This includes a widget and a pop-up window. When a site visitor clicks the widget, a pop-up appears, either discussing a discount or providing a field to input an email. The advantage is that the widget is noticeable but doesn't obstruct browsing the site, while the pop-up is shown only to the most interested individuals.
- Multi-page or dynamic pop-ups: Forms with unique functionality. For example, a game-like roulette where users can participate in prize giveaways while providing their contact details.
- Feedback windows: Customers leave a request for a callback to understand the purchase conditions. Usually used for complex products.
- Access to content: Offering valuable content in exchange for contact details is an effective way to generate leads.
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Web push notifications
Web push notifications come in two types. In the first case, when a visitor enters a website, they immediately see a pop-up window:
Example of web-push on a website
This option is quite common; you can quickly close it and block notifications. Here, there are no additional steps.
There's another variant that involves multiple steps. Initially, the user sees an offer on the website to subscribe to notifications. Only after clicking on the widget does the standard browser window appear, requiring confirmation to subscribe.
While an extra step might reduce conversion, those who do subscribe are more likely to be your target audience, not just accidental clicks.
Chats
Online chats are considered a lead generation channel as they enable direct engagement with users to offer assistance or products. Visitors often close these chats, so it's better to keep them initially hidden and provide an icon for users to open when needed.
Example of online chat
Referral programs
Referral programs involve inviting friends, providing both parties with bonuses or discounts, making it an effective and understandable strategy for customers.
The success of a referral program depends on its thoughtful construction. When executed well, it generates new leads almost cost-free through the activity of existing customers.
Partner mailings
Partner mailings entail mutual advertising in each other's newsletters or emails, allowing companies to exchange databases with partners. A joint campaign could also be organized. It's crucial to select companies whose audience aligns with your business for this approach to be effective.
Groups on social media
Groups on social media can lead to leads, but it's crucial to craft the right content plan. Simply posting isn't enough; the goal is to convert group followers into leads. For instance, redirecting users to the company's website can be effective by adding a CTA prompting them to visit the site.
Chat bots
To acquire potential leads using chatbots, it's vital to create incentives for users that encourage them to initiate the first dialogue. The motivational methods can vary depending on the specific product and messenger platform. Even if a person doesn't take the desired action, the chatbot retains the conversation, allowing them to do so in the future.
App installation
App installation is also an excellent way to generate customer leads. When a user downloads an app and registers within it, they often leave their contact information.
Installing an app is a great way to collect leads
After obtaining the data, you can add the user to your communication chain. For instance, you might request permission to send notifications to their phone.
Offline
Collecting leads in this way is suitable for those who have retail outlets or provide services in both offline and online formats. It's challenging to merge data obtained from offline and online sources. For example, a store sends an email newsletter to its clients about seasonal discounts. A customer receives the email and makes a purchase in the physical store, not online. Tracking whether the newsletter influenced the purchase becomes difficult in this scenario. To address this, implementing a loyalty program where each customer has a card valid in both the online and physical stores could be a solution.
Properly structuring lead generation is crucial to assess outcomes and understand how online and offline methods interact.
Call or SMS Message
When a client contacts a company via call or SMS, their number remains in the CRM. To accurately calculate CPL (Cost Per Lead), it's essential to track the source of the call or SMS.
For calls, this can be achieved using substitute numbers. Special services offer unique phone numbers for different offline sources. However, utilizing such services might be expensive, leading many companies to forgo distinguishing between offline channels and base CPL calculations on overall results.
Small companies face a similar situation with SMS messages. Lead generation often involves offering clients to send an SMS to a short number. However, using short numbers can also be costly for small businesses.
QR Codes
QR codes can redirect individuals from offline to a website or an application. Tracking this channel is straightforward; you simply need to include a UTM tag in the link. To encourage individuals to leave their details, creating an engaging quest can be effective. For instance, when scanning a QR code, a user might engage in a product introduction game, and to receive the results, they would need to provide their contact details.
Surveys
Everyone remembers the scenario: before receiving a loyalty card, you have to fill out a survey. Typically, it includes fields for entering a phone number or email and asks where the person learned about the company.
When a buyer fills out such a survey, they become a lead. This method helps identify where new buyers are coming from.
Sometimes, companies offer surveys or request contact details to provide a free sample of their product. For instance, these promotions might occur at exhibitions, where staff engage with event visitors. Such events not only contribute to generating potential clients (leads) but also:
- Brand promotion: Enables active brand advertising and enhances its visibility among potential customers.
- Brand familiarization and its benefits: Provides potential customers with the opportunity to learn more about the brand, its products, and unique features.
- Building brand loyalty: Creates a positive impression of the brand, contributing to longer-term relationships with customers.
- Product trial: Offers customers the chance to experience the brand's products before making a purchase.
- Segmentation: Assists in identifying customer interests and preferences, valuable for crafting personalized marketing strategies.
There are other methods for offline lead generation and tracking their sources, but the aspects listed above are among the most significant and beneficial.
How to assess lead quality
Leads are categorized as cold, warm, and hot based on their interest in the product.
Cold leads are less prioritized. They might have visited the site but haven't progressed further in the sales funnel. Their interest usually develops after email campaigns, gamification, or promotions.
Warm leads are individuals interested in the product but not yet ready to purchase. They might have filled a form or added a product to their cart but haven't proceeded further. To convert warm leads to hot leads, strategies like email campaigns to build brand trust or targeted ads with discounts or product consultations are effective.
Hot leads are the most prioritized group actively seeking to make a purchase. The sales department engages with these leads to motivate them toward buying.
To gauge how well a client's profile matches the ideal one, certain criteria are used: geographic location, company size, and client issues.
Additionally, attention is given to user activity; for instance, a lead that filled out a form on the website and confirmed an email is more valuable than someone who merely visited the site and left contact information. Points are assigned for each type of activity to determine the qualification level.
Mistakes in lead generation
Mistakes in lead generation for businesses often occur when the company emphasizes quantity over quality of leads. The following are notable:
- desire for quick leads: wanting leads in short timeframes;
- improper lead qualification: incorrectly establishing lead qualification criteria;
- excessive subscription forms: having too many subscription forms;
- lack of user benefit: failing to provide value to the user after subscription;
- lengthy subscription forms: using lengthy subscription forms;
- absence of welcome sequences: not having welcome or other nurturing sequences;
- excessive pop-ups: having an overwhelming number of pop-up windows;
- technical glitches: facing technical issues;
- poorly configured traffic source: not properly configured traffic sources, resulting in unclear lead origins;
- lack of personalization: absence of personalized approaches;
- misaligned communication channels: choosing the wrong communication channel;
- high sign-up incentive, low interest in engagement: offering a high bonus for sign-ups, but the user remains uninterested in engaging with the brand.
Summary
Lead generation is a marketing activity aimed at obtaining contact information from potential customers.
There are various lead generation tools such as website subscription forms, chats, calls, QR codes, and more. To determine the quality of leads, it's essential to assess their interest in the product, alignment with the ideal customer profile, and level of activity.
The outcome of lead generation relies on choosing the right channels, a well-crafted strategy to attract subscribers, and effective communication with them.