A key goal for any growing business is to attract new customers and increase revenues. For business-to-business (B2B) companies this often involves lead generation - the collaborative effort between sales and marketing teams to attract the right kind of buyers at the right time.
As a 2-time software company CMO, I've come across many effective lead generation methods. I've also made many mistakes using lead gen methods that don't work anymore. Let me share with you some best practices on generating leads that actually drive sales impact in today's competitive sales environment.
You'll get practical tips from my proven generative AI lead gen playbook, but let's start with a few core definitions.
What exactly is lead?
A lead is any person that shows interest in your product or service. Leads can come both through sales initiatives where the person is contacted directly by your business, or through marketing where the person shows interest in your product or service.
Each company will have their own definitions of what a lead, whether it is defined by sales, marketing or product engagement. The key common aspect is that it is an individual person (ie. not a company) with the potential of turning into a paying customer.
Sales Qualified Leads (SQLs)
Sales qualified leads are any relevant contacts who have expressed a clear interest in your product or service. This can be people who have requested a product demonstration on your website, or people who have accepted a sales meeting with your team.
Marketing Qualified Leads (MQLs)
Marketing qualified leads are typically relevant contacts that have engaged with your marketing content and can be contacted by your sales team. This can be persons who have submitted their email address to access sales material on your website or after seeing your advertisements on social media.
Product Qualified Leads (PQLs)
Product qualified leads are any contacts that use your product and show interest in paying to use the product more. This could be people who have used a product trial or free version of your product with interest in upgrading.
The definition for an SQL, MQL or PQL differs in each company, or these abbreviations are not used at all. Some companies they simply talk about "leads." Whatever the case, sales and marketing teams need to be aligned on definitions, so to avoid any confusion or conflict down the line.
What is lead generation?
Lead generation is the process of attracting the interest of potential customers. Lead generation is most often a shared responsibility between sales and marketing with the goal to identify and reach ideal customers in the most effective and efficient way.
One common misconception is that lead generation is a transactional task, for example, through buying contact details from a sales directory or by collecting email addresses through a social media advertising campaign. Until you have qualified that the leads are relevant to your business these activities are not lead generation, it's contact generation. The quick and easy ways to acquire contact details rarely result in quality leads, and set the wrong expectations for effective lead generation.
Why is lead generation important
While lead generation is rarely easy, it is extremely important for growing businesses to get right. According to research from Saleo.io, early stage software-as-a-service companies spend up to 30 to 50% of their budgets on sales and marketing with the goal of acquiring new customers. Even for larger companies, investments to acquire new customers are almost always some of the most important decisions a company can make.
The key thing to keep in mind in lead generation is that the buyer is in control of the purchase decisions today. With endless amounts of information available on the internet and a many good options to choose from. In this world, it's good to keep in mind that 95% of potential buyers are not currently in the market for your products or services. Effective lead gen involves helping buyers understand their problems and identify the solution to their needs when the timing is right for them.
The ideal lead generation process ... doesn't exist!
One of the longest lasting myths of B2B sales is that a lead generation process is linear. In many go-to-market plans sales and marketing leaders draw images of a "lead funnel" or other step-by-step process where high volumes of customers are steered from one stage to another.
Classic sales funnel that converts leads
Each sales and marketing team will have their own model for lead generation. A typical one looks something like this:
1. Identify target audience - decide who is your ideal buyer and find out where they can be reached.
2. Create a compelling offer - define your product's unique selling point and communicate it to potential customers.
3. Attract interested leads - use methods like direct sales outreach, performance advertising or inbound marketing to reach large numbers of potential customers.
4. Qualify leads - assess whether each potential buyer has budget, authority, need and a timeline to buy.
5. Convert deals - persuade a lead to "convert" into a paying customer.
The reality is that customer buyer journeys rarely follow such a linear path. Gartner has produced an interesting way to visualize the complex path of a B2B buying journey.
In many cases, companies have many stakeholders responsible for deciding products or solutions to buy. While they may evaluate different options by researching, exploring and even engaging a number of different potential solution providers. The reality is that the majority of a purchasing process happens without involving any sales representatives. In this world, the lead is the boss of both the buying journey and timing.
There is more need than ever to generate quality leads
Once you accept the reality that only 5% of your potential customers are ready to buy you can reframe the way you build your sales funnel. Counter-intuitively this means that lead generation is more important than it has ever been. The key change is to shift from focusing on the quantity of leads to quality of leads.
How do you qualify a lead?
One of the most used lead qualification methods, BANT, was invited by IBM already in the 1960s. In BANT, the goal of the sales representative is to assess whether leads have the (B) budget, (A) authority, (N) need and (T) timeline to realistically close a deal. While it is simple, BANT still has use today, and if consistently used can be a useful framework to assess the quality of leads coming from different marketing and sales channels. The downside of BANT is that it often produces a "yes" or "no" answer, while the reality is that many buyers can still be supported through their sales process.
Another commonly used lead qualification framework is MEDDIC - which stands for (M) metrics, (E) economic buyer, (D) decision criteria, (D) decision process, (I) identify pain, and (C) champion. The MEDDIC framework is especially useful on longer sales cycles (such as B2B sales) where you may need to invest more time and resources to close each deal, but you still want to keep an accurate view on revenue forecasts and the return on investment in marketing initiatives.
In the end of the day, your type of lead qualification method doesn't matter as much as consistently sticking to the effort of qualifying leads and improving the quality (not quantity) of leads. If you don't focus on quality you can quickly create conflict between sales and marketing generating the wrong type of leads.
The good and bad part of lead scoring
Sometimes sales and marketing teams utilize lead scoring as a method to assess and agree on the quality of different kinds of leads. Lead scoring can come either as an automated function or as a manual exercise.
Automatic lead scoring - companies that use a sales and marketing automation platform such as Salesforce or Hubspot can utilize an automatic method of lead scoring. For example, an automated lead score within your CRM gives a certain amount of points to engagement metrics such as visiting a product page of the website or participating in a webinar.
Manual lead scoring - some companies also utilize manual lead scoring to assess the quality of leads or new contacts. For example, companies that invest in trade shows may review the amount and quality of people who engaged with sales during or after the event. The aim of manual lead scoring is to get an "apples" to "apples" comparison of two similar investments to try to understand whether the event was worth the money. Manual lead scoring is more difficult in areas like online marketing where the volume of contacts reached and leads generated is much larger and more diverse.
In the end of the day, lead scoring is only valuable if the scoring method also influences future investment decisions. Also, the quality of a lead is determined by whether the customer is not only converted, but is also retained. Some of the best forms of leads are former customers who have moved to new roles, or referrals from happy customers. Whatever lead qualification method you use, you should ensure that these high-value contacts are not excluded through too much operational qualification.
Analysing lead and customer journeys
An alternative to lead scoring is analyzing ideal lead or customer engagements. In this method, you start by deciding which contacts are the best quality and work back to see what brought them to your company. While the volume of contacts analyzed is typically smaller, you can learn a lot about the journeys of your ideal customer profiles (ICPs).
In revenue contact analysis, you evaluate the engagement steps taken by ideal customers. For example, you may ask a new customer to fill out a survey during on-boarding, interview key decision makers, or even look at historic conversion data in your CRM. Sometimes the revenue analysis can produce surprising results. For example, dreamdata.io research found that there are at least 31 touches or interactions with a product sales or marketing resources before a deal is closed. That's 31 times a contact sees an advertisement or gets a contact from a sales representative.
In self-reported attribution you ask all inbound leads where they heard about your product or service. This could be as simple as adding a free-text field in your demo booking form asking everyone who requests a demo "how did you hear about us?" Often the actual words of high quality leads or customers outweigh the data you see in your CRM for a particular contact. For example, you may see that the person found your website through a Google Ad in your Salesforce records, but the contact will say in self-reported attribution that they heard of you from an analyst firm or customer.
How do you nurture a lead?
Lead nurturing is the activity of educating and informing buyers that are not yet ready to buy. Nurturing can be done be either the sales or marketing teams on an individual basis, or through automated methods.
Common lead nurturing techniques include:
- Drip campaigns - emails that are sent in sequence to tell a story over a number of interrelated messages.
- Webinars and events - 1-to-many events where buyers can be exposed to product demonstrations and key sales messages without the urgency to talk to a sales representative.
- Marketing automation - automated methods to give a personalized experience to leads, for example, when they visit your website.
- customer referrals and case studies - often buyers want to hear from other buyers before they are ready to commit to a purchase.
- free trials or interactive demos - many companies that utilize a product-lead growth strategy give free access to the full features of a product. This way potential buyers can experience what the product does before they talk with sales.
The key to effective lead nurture is to develop and maintain a positive relationship with buyers. Rarely do people want to be reminded about the existence of products. Instead, educating and helping buyers compare their options are often far more effective lead nurture approaches.
Proven lead generation strategies
If you ask 10 sales leaders what lead generation strategies work, you'll probably get 10 different answers. That being said, there are clearly a number of lead generation strategies that have been proven to work across many business-to-business companies.
- Organic awareness - at the top of lead generation strategies comes organic awareness, or more commonly, search engine optimization (SEO). For effective lead generation companies, it's typical to see between 60 to 80% of website visitors coming from unpaid search engine visibility, with a large portion of new business coming from Google and Bing. The challenge of organic awareness is that SEO is often a competitive space, where the best products are easily lost in the second page of Google search results.
- Social selling - another proven but difficult lead generation strategy is social selling, for example, through sharing thought leadership content on LinkedIn. If you do unlock social selling the good news is that you can get vast amounts of high quality leads without a cost. The downside is that potential buyers are often not ready to see too salesy messages on social media.
- Cold outreach - an uncomfortable truth is that cold outreach (such as cold calls or cold-emails) remains a highly effective way to get leads in business-to-business sales. While the effectiveness of one-to-many email campaigns has been going down consistently over time, effective lead generation teams often rely on highly engineered sales development teams that turn lead generation into an exact science.
- Paid search - these days Google is a very expensive place to advertise, but costs of search engine marketing are high for a reason. Paid search advertising remains a great place to find leads that are searching for potential products and solutions. In many cases, the high cost is justified with a high return-on-investment.
- Paid social - for many companies LinkedIn has become a great source of new business. In LinkedIn Ads you can reach exactly the right types of leads from the ideal companies you want to target. On the downside, LinkedIn Ads can be some of the most expensive forms of online advertising around. Some clever advertisers utilize more cost-effective social media platforms such as Facebook or TikTok to reach relevant leads at a lower cost.
How to use generative AI to generate leads
Pardon the pun, but generative AI is a great resource for generating leads. Many lead generation methods are well documented, repetitive processes that can be easily automated or streamlined based on clear guidance.
GenAI can significantly speed up the efforts of sales reps and marketers, and also give surprisingly creative new skills to test out. Here are a few common areas for using generative AI in lead generation:
- Use AI in SEO. In many SEO tasks generative AI tools and techniques help you do your work faster and more efficiently.
- Generate sales enablement content. Generative AI can help you quickly create more personalised and sales-relevant content for your ideal audiences.
- Personalize outreach. Generative AI can help you create more personalized email campaigns, even creating sequences of highly relevant emails for each sales lead.
- Social media automation. While it is not recommended to spam social media platforms, generative AI can help you create new content and engage more actively on social media.
- Create new ad copy. Generative AI lets you create many new variations of advertising copy that you can test and optimize in Google, Facebook or LinkedIn ad campaigns.
- Data enrichment. You can use generative AI to build a better understanding of your leads. Caution: do not add into ChatGPT any sensitive information of your contacts or sales pipeline.
- Creativity and copywriting. While generative AI does not replace or compete with professional copywriting, you can use it to create different versions of your key sales messages that can be creatively tested in email and online outreach.
The bottom line on generative AI lead generation
We've reviewed core definitions of lead generation, as well as some of the best practices on how to get better quality leads.
While generative AI is a potential way to speed up or improve the efficiency of lead generation, it's important to remember that people buy from people. Lead gen is often a collaborative effort where the more effort you put in, the better results you get over time.
If you're looking for a partner to improve your lead generation strategies, reach out for a 1-1 consultation. I can share more of my top CMO tactics, as well as best practices gained from working at Google and top marketing agencies. I can even share new ways to leverage generative AI in lead gen that could give you an additional edge.