What is Lead Generation, and Why Does it Matter?
I don’t know anyone who would say that lead generation is not one of the most important tasks for every business. Understanding the needs of your company and your clients, knowing how to use data in your favor, and understanding how to generate leads are essential for success. Who doesn’t want to acquire potential customers who might be interested in their business? Right?
The problem is that lead generation, like branding and marketing, is sprinkled onto any business problem as a magic pixie dust that will solve it all. Don’t get me wrong, though. It can feel like magic when you have a good lead generation plan.
However, the magic lies in clarity. Clarity in whom you target, the exact problem you solve, what you say, what communication channels to use, how you capture those that are interested, how you nurture them into better leads, and finally how you convert them into customers. This is difficult. And not because making a plan is difficult. No, the difficulty lies in having to make concrete decisions, and most struggle with doing that. But it’s worth it, and it will make you money. Hence, this article.
The goal of this article is to simplify the dialogue on leads and lead generation and provide you with a 7-step guide to develop your own practical lead generation plan.
The basics of lead generation
Let’s explore some of the basics of lead generation. Generally, there are three phases of contact with your company. In the first phase, we are talking about prospects, and they are considered to be unaware of your company or know very little about it. Your efforts here will mainly focus on teaching prospects about your company and getting them to show interest. When one of these prospects ends up showing interest, they have converted into a lead. This is the start of the second phase.
The second phase mainly consists of developing effective ways of capturing leads and nurturing them into qualified leads until they convert into customers.
Lastly, in the third phase, we are mostly trying to retain our customers and get them to refer us to others. In Allan’s awesome book, “The 1-Page Marketing Plan”, he calls these the before, during, and after phases. Lead generation is focused on, before and during, the journey from prospect to customer.
Simply put, lead generation refers to processes for converting prospects into qualified (sales ready) leads. This is done by sending a clear message to a target group through the communication channels they are most likely to interact with, using a clear call to action that links to a lead capture system from which they can be nurtured into qualified leads.
Lead generation processes come in many forms. There is outbound lead generation and inbound lead generation. They can be online or offline, and may have significant differences between B2B lead generation strategies and B2C lead generation strategies. But what we find particularly exciting is that with the advent of digital marketing, most lead generation strategies can be fully automated.
The advent of digital marketing and how it made automated lead generation accessible to SMBs.
We all know in some sense what digital marketing is. It’s a process that helps businesses grow their customer base by reaching out to potential customers through various digital marketing channels.
Digital marketing includes paid search engine advertising like Google Ads, paid social media advertising like Facebook ads, sponsored content on websites like BuzzFeed articles, banner ads on websites or mobile apps, and advertisements on YouTube videos or Twitch livestreams. However, the most popular channel is email marketing, followed by social media and search engine optimization.
Why digital marketing? Well digital marketing is important because through it’s channels of email marketing, social media and search engine optimization it has allowed companies to zoom in on a more specific target group while also making communication with the target group more affordable, measurable, and trackable. It is with these channels that automated lead generation comes strongly into play for SMBs.
Historically, automated lead generation was only available for large companies who could afford the costs. But now, there has been a marked increase in affordable lead generation tools that allow smaller companies to take advantage of this technology. As a result of this, SMBs can now implement automated lead generation to become more productive, more profitable, and more consistent with a smaller team.
I think it is important for all companies, big, medium or small, to make use of automated lead generation because it is not just about generating leads; it’s also about saving you time and money so that you can focus on growing your business.
The importance of having a plan
To most, marketing is an afterthought. When we do consider it, we look at the advertisements we see most often. We try it; it works nominally or not at all; and we decide that marketing doesn’t work in our industry, or it is only a cost. Maybe then you look at your industry and confirm your beliefs, as most of the other participants are either not doing it or are not investing a significant amount of effort, time, and money in it.
I want you to think about that one company that has some significant effort behind their marketing. How are they currently perceived? How are they developing? When did they start? Is there a difference? If you can’t find one in your industry specifically, look at an adjacent industry. There will always be outliers. Maybe they’re not doing marketing in the common sense of the word, but they’re definitely doing lead generation (i.e. it’s still marketing) through the channels that work best in their specific industry.
The problem is that most of the marketing we see is actually branding. These are done by companies that have a lot of money to tell people what they are all about. There’s no specific offer or call to action. Can you afford to shoot arrows in the air and hope it falls on your prey? Can you afford to spend money like this?
An effective lead generation campaign needs to be trackable, measurable, specific in offer and target market, and have a strong call to action. We’ve seen time and time again that a cohesive implementation of these factors is impossible without a plan. That’s why we decided to share the following 7-step plan.
The 7-step lead generation plan
The online lead generation process is a complex but rewarding part of marketing. But with this article, we are going to break it down into simple steps that allows you to make a practical working documents that you adjust regularly as you grow. This practical working document can be particularly effective for small and medium businesses, as your goal relative to a giant corporation is much simpler: get more sales.
Lead generation can be broken down into 7 major decisions:
- Set your business goals.
- Define your budget
- What is your business niche?
- What is your unique selling proposition (USP)
- What channels of communication are you going to use to communicate your USP?
- How will you capture the people who react to your different channels of communication?
- How will you nurture them into qualified leads?
1. What is your S.M.A.R.T. business goal for the next 12 months?
Goals are essential for business success. How can you make a plan to achieve something if you don’t know what you are trying to achieve. Your positioning will be allover the place, your messaging will be generic and broad, and you will have no commitment to industry or type of customer. Even worse, you may even be uncommitted to the discipline you specialize in. if this sounds like you than you need to pay extra attention to this step.
If you feel like you are lacking clear goals, the first thing to do is to set some S.M.A.R.T. goals. These are specific, measurable, attainable (sometimes the goals are so big that you give yourself an out), relevant, and time bound. S.M.A.R.T. goals allow you to understand how you can accomplish your goal, but also when you have accomplished it. Also, it allows you to break it down in to more manageable steps.
Typically, I would ask you to start with your “someday” goal and then your 5-year goal. But for the purposes of this practical marketing, we are going to start at the 1-year goal. Furthermore, I am going to assume that the main reason you are reading this article is that you want to increase your total revenue.
For this first step, I want you to think about the revenue you want to generate in the next 12 months. This needs to be a specific and attainable number. And then I also want you to define in how many customers you want or need to achieve this goal.
Based on this, we can calculate how many leads you need each month to achieve your goal. If your lead to customer conversion rate is 10%, then you need to divide your desired amount of customers with 0.10 to get your total number of required leads for the year. And that divided by 12 then you know what you require for the month.
We’ve created a sales, traffic, and lead calculator for you for easy planning of your 12-month sales and lead goals. You can find it here: sales, traffic, and lead calculator.
2. What is your lead generation budget?
We all dream of making money without spending money. But it’s not realistically possible. Even if you are not doing advertising, you are paying for the phone bills that you use for your cold calling. You are also paying for lead generation when you go to an event to do your networking.
It’s more difficult to attribute these to a specific sale, regardless they are still expenses you can attribute to lead generation. It’s better for you to set a budget and track how well you are using that budget and how many sales it is generating. If you are not measuring then you have no idea of what is working, what is not. You may be wasting money that could be more effectively spend elsewhere.
Depending on your industry, your lead generation budget should be somewhere between 2% to 10% of the goal you defined in the previous step. The higher, the better, but I can definitely understand the reluctance to put 10% of your sales goal in lead generation. However, if you are measuring, working with a budget, and specific goal you should know whether it’s making you money and if it’s not then you need to adjust your strategy.
The goal of this plan is to laser focus your budget on the most effective lead generation methods for you. The smaller your budget, the more important this laser focus is. And if something is not working, you should also know what you are going to try next.
Your exercise here is to calculate both the 2% and the 10% of your 12-month goal, divide it by 12 and see how you feel about each. Finally, make sure you choose an amount somewhere between those two.
3. What is your business niche?
Choosing a niche is hard. In our experience, it’s one of the harder choices to make, as it feels permanent. But you’re maybe asking yourself: why should I be niching at all?
Well, niching as an organization is a major debate. But niching for your lead generation plan is definitely a must. For maximum budget efficacy and efficiency, you need to have a clear target audience, clear messaging, communication channels that best fit with your target audience and messaging, an offer that is highly valued by your target audience tied to your lead capture system and a lead nurturing system.
What you should be trying to do here is identifying the minimum viable audience (MVA) you need for you to reach and sustain your 12-month business goal. A lovely explanation provided by Seth Godin goes as follows: “When you seek to engage with everyone, you rarely delight anyone. And if you’re not the irreplaceable, essential, one-of-a-kind changemaker, you never get a chance to engage with the market.”
Imagine you have $1000 per month to conduct your lead generation campaign. The total number of prospects you target highly determines how much money you can spend on each, which can heavily impact your chances of delighting and converting them. If you are spending $1000 to reach, capture, and nurture 1000 prospects, you only have $1 to spend per prospect. What happens if you spend that $1000 on 10 highly targeted prospects? How much more can you do to entice the prospects with $100 rather than $1? This is why creating a niched and targeted campaign is so important.
You can start the process of defining the niche for your lead generation plan by splitting the question “what is your business niche?” into a more simple equation: your company name + what you do + who you solve it for + the problem you solve = your business niche.
In our case, it’s: CURONOMY is a lead generation agency that creates automated systems that allow small, specialized organizations to have a consistent flow of sales.
What do you do?
What you are looking to define here is your product or service in its most basic form. For us SMB vigilantes here at CURONOMY it’s: We create automated lead generation systems.
What problem do you solve?
If you properly define a problem, the solution becomes much more obvious. You make it easier to solve, which can lead to time, money, and resources being saved. The difficulty in defining a problem lies in the patience it requires. To facilitate this process, we will use the problem definition filter by Michael Cooper.
Start by answering the following questions:
- What impact does the problem have for the client?
- Example: A company without a lead generation system will have difficulty generating revenue. Without consistent leads and sales, companies won’t be able to grow or hire resources. The company will be based on word-of-mouth and its success will depend on luck.
- What are the consequences for the client if the problem is not solved?
- Example: Ultimately, they are likely to remain stagnant or stop existing.
- What emotions does the client feel when dealing with the impact and consequences?
- Example: The owner and team will feel stressed and trapped in their organization and possibly end up feeling like business is not for them or the market was not right.
The next step is for you to fill in the blanks. The problem we are trying to solve is: ……
Example: The problem we are trying to solve is: the inconsistent flow of leads and sales that organizations have due to not having lead generation systems in place.
Finally, you have to keep asking yourself, “why is that a problem?”. You have to do this until you can’t land on another problem, or you land on unexpected consequences. If the latter happens, that means the previous problem was the answer.
For who do you solve this problem?
Lastly, you have to decide who it is you want to solve these problems for. This should be a combination of the type of industries you like working with, the type of clients that can afford your minimum level of engagement, characteristics of their business, and then drill down to 2 or 3 buyer personas.
4. What is your unique selling proposition (USP)?
It can be difficult to find a truly unique business. Many businesses sell similar products and provide equally good quality. This can be seen in the cases of clothing shops, hardware stores, air-conditioning installers, and electricians.
The key to successful selling in this situation is identifying your “unique selling proposition” (USP) and exploiting it to the best of your ability. If you cannot define what makes your offering different from similar businesses, then you cannot appeal to potential customers. But don’t make it overly complicated. Have you heard of being “different enough”? You need to be different enough from your competitors, but not so different that your target audience cannot identify you as part of the market.
By now you should have already defined what you do, the problem you solve, and who you solve it for. The next step is to develop your USP (your different enough factor) by defining how you do it and why you do it.
How do you do what you do?
Now that you have defined the problem you solve, you need to describe your process for solving this problem for clients. This is not always an answer that is at play, but it is an important answer to have ready in case the question ever comes up.
When a client comes to you with a problem, they want to know that you have a clear process for solving it and that you can articulate it in a way that helps them understand where the issue is. If they feel like your solution is unclear or that you can’t clearly articulate what’s wrong, then they’re going to cast doubt on your ability to provide value.
Why do you do what you do?
Simon Sinek has a powerful message: that organizations should always start with the why. We recommend any company to at least explore this idea, as your why serves as a driver for your organization. People need a strong and compelling reason to take action. It’s important to define your why.
However, for this lead generation plan, we have yet to find out what the most compelling formulation of your why is. The whole idea here is to formulate a why that fits best with your offering in this campaign and measure how compelling it is for your target audience. We need to provide people with a strong, compelling reason to take our offer and become part of our community or clientele.
Crafting the message for your lead generation campaign
The last step you need to take In order to find your niche is to figure out what your core message is. This is essentially formulating the previous steps into a short, cohesive, easily repeatable story. Why do you do what you do, for whom you do it, the way you do it?
5. What channels of communication are you going to use to reach your niche?
Now that you know who you want to target and what you want to tell them, it’s time to decide how you want to reach them. However, you cannot randomly choose a channel of communication. Many, and we mean MANY, organizations default to saying social media. For most, social media actually works. However, all channels of communication have their pros and cons, and at Curonomy, we believe in making active choices. It all depends on your target audience, competition, budget, and other factors.
Let’s start by listing the most common channels of communication that a business can use.
- Cold calling
- Marketing stunts
- Advertising & SEM
- Organic social marketing
- Paid social marketing
- Public speaking
- Network /Networking
- Strategic partnership
The questions you should be asking yourself is: via which of these channels could I possibly reach my niche? Which of these channels works best for the product or services I provide? Which of these channels are best for sharing the message I have for my niche?
It is important to consider the reach and growth potential of each channel when deciding which ones will work best for your niche. Once you have chosen which ones you want to use, it is also critical to choose the type of content that will be most suitable for each channel: videos, blog posts, infographics, or photos, carousels, etc.
The more channels you use, the more work it becomes. In the short term, it’s best for you to choose a limited amount of channels and commit for a certain time period to learn what works and what doesn’t. If it seems like one or more channels are not working, it’s important to conduct a thorough analysis on the channels, preferable with an expert of the channel, and decide whether to migrate to other channels.
6. How will you capture the leads who react to your different channels of communication?
What’s the purpose of your advertising? Is it to get your name out there? If you said yes, then there is a good chance that you see marketing as a cost or will start seeing it as such after the current campaign stops. The purpose of your advertising, regardless of the channel you are using, should be to find people interested in what you do.
Once somebody responds, you have to capture their information somehow so that you can follow up with them. Lead capture systems of two main goals: capture information of leads and identify how ready the lead is to make a purchase (lead scoring). A lead that has a high lead score, the lead is ready to buy, is a qualified lead.
This step concerns itself with designing offers that entice people to leave behind their information in return for some value you provide them. When SMBs are advertising, it’s important to not sell something immediately. The majority of people that see your ad are not yet ready to buy, but there is a bigger group that is interested in what you do and can be nurtured into buying from you down the road.
Your lead capture system allows you to bring these people into your sales funnel and allow you to nurture them into customers down the line. Furthermore, having a lead capture system allows you to provide a more tailored offer to your leads, which in turn means a higher chance of conversion to customer. In order to design an enticing offer, you need to ask yourself: What is valuable to your prospects? What can you provide them that gets them so interested that they almost can’t believe they are getting the offer?
We have described some common lead capture offers in the following article: https://curonomy.com/example-lead-generation-offers/.
The last, but most important part of your lead capture system is your customer relationship management system (CRM). A CRM is a system that allows you not only save your lead and customer information but also track your contact points with them, and we like to go a bit further and use the CRM as a company’s control tower for all its automation. It’s the heart of your business.
7. How will you nurture them into qualified leads? (lead nurturing system)
Lead nurturing is a process of converting your leads into customers by providing them with the information, stimulation, and communication in order for them to take the next step in their buying journey. The key to successfully convert leads into customers is to provide the right content at the right time, which will also depend on your audience. You want the leads to reach a point where they want to buy from you, rather than you having to sell to them.
Allan Dib puts the core of nurturing beautifully, “in marketing, the money is in the follow-up”. Once a prospect has been converted to a lead through your lead capture system. You need to continually provide them with value packed content focusing on the problem they have and/or the solution they are seeking. It doesn’t need to be your content, It just needs to be genuine and relevant information that may help them. Furthermore, you need to regularly stay in contact with them to prevent your leads to forget about you.
This is where marketing automation software shows its true value. It helps you nurture potential customers by sending them targeted email messages before and after they have engaged with your brand at pre-determined moments based on behavior characteristics that have been programmed in your CRM system.
However, for this to work. It is important for you to have a system in place that will help you identify the different lead stages. This way they are always able to select the right type of communication for each lead stage and keep their leads satisfied and well-informed.
Your sales conversion strategy
If you have at least read everything up to now, you should have some clarity in how a lead generation system should look like from prospect to qualified lead. The last step that you would have to take is developing your sales conversion strategy. Once you have the qualified leads, how do you get them to cross the line from lead to customer? We’ve written an article on this you can find it here: Article on sales conversion strategies.
For now, we are creating a step by step system to help you generate a PDF with your one-page marketing plan. Sign up below to find out when we release it.
Besides our personal experience there are few resources that have contributed to this plan:
- Allan Dib’s awesome book, “The 1-Page Marketing Plan“.
- Michael Cooper’s article, “Defining Problems: The Most Important Business Skill You’ve Never Been Taught”.
- Seth Godin’s articles “In search of the minimum viable audience” and “The minimum viable audience“.
- Entrepreneur.com’s article “Unique Selling Proposition (USP)”.
- Everything Chris Do