Basic Concepts about B2B Lead GenerationMay 4, 2018 - Marcel Odena
Generate leads for companies consists on getting contact data of people ideally with the desired professional profile in exchange for something that your company offers, typically some digital content like an ebook on some topic of interest, or an invitation to see a webinar of a reference lecturer of your industry, etc. The company is interested in getting many leads, many people to make themselves known and eventually get to sell their products or services. With this purpose, the company thinks about what interests its audience and produces the necessary content, be it ebooks, webinars, workshops, podcasts, etc. in order to create its audience and get leads. On the user’s part, he/she provides his/her contact information to the company, by typically filling out a form, in exchange for having access to that content of his/her interest.
What does lead mean?
The translation of “lead” would be “contact data”. Therefore, for a company to get “leads” means getting “contact data” of people, with the nuance that should have a certain interest in what sells this advertiser (without this restriction, selling would be so simple as taking the old yellow pages, and call the contact data that appears there, and we all know that in this way barely nothing is sold, at the same time that many resources are wasted).
B2B lead generation
Generating B2B leads consists on getting a lot of contact data from people, with a specific professional profile, who works in certain companies (Business ) and who are interested in the products and/or services that another company sells (another Business), hence the term B2B (Business-to-Business).
The idea behind the lead generation technique is to get contacts with a considerable interest in what your company offers to facilitate the sales process (short/medium/long term). And this interest can be active on the lead’s part, that is, this lead has been looking for a solution to a problem and your company offers a solution. Or also, this interest can be “passive”, that is, this person is not looking for any solution at that time, but potentially, because of the characteristics of the company in which he/she works and the professional profile that he/she has, will probably end up having that need/interest.
Practical example of lead generation
To understand better what it means to get B2B leads, let’s give an example. Imagine a company that sells software for financial topics in “SaaS” (Software As A Service) mode . The professional profile of your main potential buyer is the financial director of a large company, typically a company with more than 50 employees. Well, for this company capturing leads is to get the contact details of the directors of large companies . With what objective? With the objective of selling their software. Imagine that in total 100 leads of these characteristics are achieved. Then the sales team will come into action and with these 100 leads they will work on them and surely only a low percentage will end up buying. Imagine that 5% of all leads buys it, this would mean that 5 sales would have been closed. With 200 leads, 10 sales would have been closed, etc. Leads is directly related to sales for a company, and this is like gasoline for a car.
In this example, our target, the financial director of a large company, may have an active interest, he may have time searching, analyzing solutions such as the one offered by our advertiser. Or, may have a “passive” interest, for instance, imagine that the company where this CFO works has about 50-60 employees, imagine that they still carry the accounting with Excel, or a fairly rudimentary software, it is not very probable but it could be the case. It is a matter of time before the financial director (or CEO) of this company begins to evaluate the possibility of using a powerful software to carry all the finances of the company. In this case our target (CFO) is not actively looking but is, potentially, a person with interest in this type of software.
How can I generate leads for my company?
At this point it is very possible that you are wondering how you can generate leads for your company, how you can get contacts to start the process of selling the services/products of your company to potential buyers. Well, there are different strategies and techniques to generate leads that could be used to write another article. Just for you to have some notions I expose different strategies to generate leads:
- Inbound Marketing Strategies: are all those techniques that have to do with the “attraction” (in-bound) of the user towards your company. Which means, that the user is attracted to something that your company offers. For example, imagine that a user goes to Google to do a search like “how can I deduct VAT from train tickets” and a result of an article of your company’s blog appears, in which this question is answered, and also, you offer a VAT refund guide. The user will most likely read the article, be satisfied with the article (if it is clearly written and answers the question) and, most likely, download the VAT refund guide. When he does this we’ll have achieved the lead.
- Outbound Marketing Strategies: are all those techniques in which it is your company that pro-actively offers something to the user. For example, your company buys a list of contacts of the financial industry in Spain and begins to contact these people to offer them the software. There are many techniques and ways to do “outbound” marketing, but they all have something in common, the user is often questioned fairly directly by an offer from your company, that is, an offer of a “buy me” type. Note that in the strategies of Inbound Marketing our company is relatively “passive”, the user takes the initiative and does a search and it is then that your company appears on Google, and not to make a “buy me” offer, but to answer his/her question (how to deduct VAT from train tickets “).
A very effective way to get leads is to combine the entire Inbound Marketing strategy of your company with Pay-per-Click (PPC) advertising techniques. Why? Because with PPC advertising we can segment users and target our target audience to offer them content of interest. For example, through the advertising solution of Linkedin (Linkedin Marketing Solutions) we can create a campaign segmenting all those users in Spain who have a Financial Director or similar position and who work for a company with more than 50 employees. In the presence of this audience we can start by offering relevant content (in the previous example, the VAT refund guide). In this scenario the user has not come to Google to do a search on how to get VAT deducted but when he sees the sponsored advertising on Linkedin he is attracted and he downloads it.
Who is responsible for the function of generating leads for a company?
The responsibility to generate leads for a company can fall on one or several departments of that company. The department that is usually asked to generate leads is the marketing department and often also the sales department:
- Marketing Department (inbound): it is usually the main department in charge of obtaining leads, especially attraction leads (Inbound). And in addition, it is usual to ask them to get a lot of leads per month. And even more, it is not worth to get 300 leads in a month and stop, they are usually asked to generate a constant flow of leads, that is, about 300 leads every month. And how is this achieved? A priori it seems impossible, but it is possible through inbound marketing techniques combined with pay per click advertising (Pay Per Click – PPC). The best part of the leads generated by this technique is that our target has expressed interest in something that we offer.
- Sales Department (outbound): there are different ways to organize the sales department and the functions of this department can vary depending on the company. That said, there are some companies that will incorporate the “lead sourcing” function into the sales department itself. This means that there are one or several people in that department who are responsible for researching the Internet, search for companies that can be objective, find what employees they have, and try to get the contact data of the employees of those companies; in the previous example, the contact information of the financial director of a certain company. It is also usual for this department to buy contact lists (a list of people with various data such as name, last name, position, telephone, company, etc.) and based on these lists begins the sales process. The problem with this technique is that the sales approach is usually “cold” and “intrusive”, and may even generate distrust on the part of our target (ie financial director) if he starts to question how we have obtained his contact information. Of course, it is still done, because statistically of each one a percentage shows interest and ends up buying. Another technique can be to attend sector tradeshows, do business and return to the tradeshow with 400 business cards (leads) and then continue with the sales process.
- Execs: another possible source for obtaining contacts can be the execs of the company (CXO’s, board members, founders, etc.). These people usually have many contacts, they usually attend meetings with other CEO’s, they usually have a very active agenda with key decision makers of big companies. And all these activities usually end up generating leads. Although the volume of leads can be relatively low the lead quality is usually very good.
Nomenclature about the origin of leads
It is usual in companies that want to achieve rapid growth, to have to generate many leads. And it is not uncommon to see both the marketing department and the sales department generate leads to subsequently generate sales and get the company to grow. And it is also usual to want to measure the contribution of each department to the final objective, to grow, that is, to gain customers and increase the monthly turnover of the company (and the net profit of the company is assumed). In this sense it’s basic, when a lead is obtained, to label its origin. One proposal is the following:
- Lead source: Inbound. Inbound means “attraction”, they are leads that have been achieved with inbound techniques, of attraction. Somehow the person has been attracted by something (an ebook, a webinar) and has given their data in exchange for the ebook. Inbound leads are usually commissioned by the marketing department.
- Lead source: Outbound. Outbound means “out”, and it means that the contact data of a person has been obtained (eg by buying a database) and that this person is contacted fairly directly (by phone, email, etc.). The leads that the sales department gets are usually labeled Outbound leads.
Metrics related to leads capture
These are some of the usual metrics that are used in the capture and management of leads:
- Number of leads: obvious, the number of leads we’ve achieved. This figure is usually broken down according to the strategy (so many inbound leads, so many outbound leads, etc.), and within the same strategy it can be further broken down, for example, in the case of leads via inbound + ppc it can be broken down the lead number via Linkedin, Google Adwords, Twitter, Google Organic, Social Networks, etc. It is also usual to give the figure of the number of leads per month, per quarter, per year, etc. And then compare results between months, years, etc.
- Cost per Lead (CPL): it indicates the cost of getting a lead. This figure is also usually broken down according to strategy, channel, etc. It is also usual to compare this figure month by month, so that we can see the trend. How is it calculated? Adding all the acquisition costs and dividing by the total number of leads. For example, suppose we have invested €10,000 in a month and we have got 150 leads, then the cost per lead would be €66.6/lead.
- Marketing Qualified Lead (MQL): indicates the number of leads that according to objective criteria the marketing department considers to be quality leads. As in any recruitment process there is a “shrinkage”, that is, a percentage of leads that are captured but when analyzing them carefully it is observed that they are not valid. Why? For example, the person who has downloaded our ebook may not have the profile we are looking for (in the example above: financial director), the person may have entered false e-mail information, etc. in the ebook download form. Of 100 leads it could be the case that only 60 leads are of quality (according to the marketing department). The process according to which the leads are qualified depends on each company and it could be on another article. If you are interested, leave a comment at the end of the article or send me a message.
- Lead Scoring: lead scoring is an Anglo-Saxon term. It means that for each lead we assign a score based on objective criteria. Points are usually given based on two aspects:
- Score according to thedemographic characteristics of the lead: user’s position, number of employees of the company where he works, country, etc.
- Score according tobehavior: depending on the pages he has viewed from the web, the type of content that has been downloaded, the frequency with which he has interacted, etc.
- Sales Accepted Leads (SALs): usually the leads that the marketing department considers of quality are transferred to the sales department to continue with the sales process. Generally the sales department also applies its quality criteria and reviews each lead to assess whether, under its criteria, it is of quality or not. In the previous example, of the 60 leads that marketing considers of quality it could happen that the sales department only accepts 40 leads as quality leads. In this case the number of Sales Accepted Leads would be 40.
- Cost per MQL or SAL: in the same way that we have calculated the cost per lead, we can calculate the MQL cost and the SAL cost. For example, if we have invested 1,000 euros and we have obtained 100 leads, each lead cost us 10 euros. Now, the cost of a Marketing Qualified Lead is 16.6 euros (€1000/60 MQL leads). And the cost of a “Sales Accepted Lead” would be 25 euros (€1000/40 SAL).
Well, I hope this article has helped you to understand better the basic definitions of lead generation. If you want to contribute some nuance, some other definition about lead generation, leave your comment below.