What is Lead Generation?
The ultimate aim of all companies is sale of the products and services. However, sales cannot happen automatically and to increase and sustain growth, sales must increase. For this, organizations must bring attention of customers to their products and services. Lead generation is the process of cultivating and nurturing the attention and interest of customers so that the products and services can be sold to these potential buyers.
Why Lead Generation is Important?
Lead generation is one of the most important parts of the marketing process. To build a solid customer base, it is important to generate leads. Moreover, as the marketing process is going through a sea change, the organizations must reach its potential customers by invading through the noise in the market. In the digital age, lead generation is increasingly becoming more important for success of companies although the modes and tricks have changed completely from the traditional methods.
The following image shows the transformation of lead generation process over time; Image Courtesy: Slideshare
Information Overload and Scarcity of Attention
The market has transformed from an information scarcity stage to a platform where information overload is the norm. There is so much information available for use in the digital age that people are bombarded with choices. This is the sole reason of exponential increase of noise in the market.
The change of the market can be understood from Google Chief Eric Schmidt’s quote, “there was 5 Exabytes of information created between the dawn of civilization and 2003, but that much information is now created every two days and the pace is rapidly increasing.”
There is a darker side of this transformation. As, information availability gets overloaded, potential customers often go through a mode of attention scarcity. That is, the potential buyers can ignore the products or services or skip the communication if no specific lead generation process is implemented to capture their attention.
The Changes in the Buying Process
In older days, potential buyers were information starving. The aim of marketing then was to provide information to the potential customers. To do so, the marketing departments usually collected names of potential customers, and contacted them to provide information about the products or services.
Nowadays, there is no such need; the potential buyers now search everything about their needs online and decide which product to buy depending on the data available on the web. Therefore, the modes of attracting attention and the channels providing the information have changed completely.
The buying process has also changed altogether – the new age buyers know everything about the product they want to buy in comparison to buyers before the digital revolution that used to learn about the product attributes after buying the product. Therefore, the aim of lead generation now is to build trust and capture the interest by selecting digital methods that can reach particular buyer groups.
From TOFU to MOFU
In the current scenario, the marketing process does not end once a new lead is included in the system (The Top of the Funnel or TOFU). In fact, it is the start of the further nurturing process that will lead the lead generated to buy the product or service. This is the Middle of the Funnel (MOFU) process. Therefore, the lead generation is now extended from just the TOFU in older days to the MOFU nowadays.
One of the Most Important Tasks: Lead Generation Research
As the lead generation process goes through a drastic and customer-oriented change, the marketing departments of organizations now need to invest their money and resources in lead generation research. It may include increasing the budgets in digital channels, such as web sites, email, social media and Search Engine Optimization etc. This is done in aim of the recent-day CMOs to attract quality leads in addition to the maximum ROI.
The Biggest Lead Generation Challenges
In a study by IDG, 61% of marketers said that the most ardent task companies are facing nowadays is to generate high quality leads. Other top challenges included converting leads to sales, creating meaningful content, and attracting higher ROI. Some of the marketers also reported that creating data of high quality leads, omni-channel effectiveness of lead generation process, and generating high-volume leads are also top challenges.
The Most Effective Channels
With the digital invasion, the most effective tactics have also changed altogether. In today’s scenario, web sites, email marketing, SEO and Paid searches (PPC) are very important tools of lead generation while conferences/tradeshows, telemarketing and events are also part of the strategy.
Here is the diagram from MarketingCharts that shows the preferences.
It is important for all marketing departments to streamline their approaches in order to attain maximum ROI and generate high quality leads. Both Inbound and Outbound tactics have to cater to the new demands in order to make a profitable sale. After all, sale is the only way to generate profits and lead generation must be the process to meet the organizational sales-goals.