What is a Lead?
Let’s start with the basics. A lead is a person who has in some way, shape, or form indicated interest in your company’s product or service.
This means that instead of getting a random cold call from someone who purchased your contact information, you’d hear from a business or organization with which you’ve already opened communication. For example, perhaps you took an online survey to learn more about how to take care of your car. If you got an email from the auto company that hosted the survey on their website about how they could help you take care of your car, it’d be far less intrusive and irrelevant than if they’d just called you out of the blue with no knowledge of whether you even care about car maintenance… right?
And from a business perspective, the information the auto company collected about you from your survey responses would help them personalize that opening communication to meet the existing needs of the potential client.
So really, lead generation is a win-win situation. It benefits the customer and the marketer.
Why Do You Need Lead Generation?
Whenever someone outside the marketing world asks me what I do, I can’t simply say, “I create content for lead generation.” It’d be totally lost on them, and I’d get some really confused looks.
So instead I say, “I work on finding unique ways to attract people to my business. I want to provide them with enough goodies to get them naturally interested in my company so they eventually warm up to the brand enough to want to hear from us!”
That usually resonates better, and that’s exactly what lead generation is. It’s a way of warming up potential customers to your business and getting them on the path to eventually buying. By showing an organic interest in your business, they are starting the relationship (instead of the business starting the relationship with a cold call), making it easier and more natural for them to want to buy from you somewhere down the line.
Data from Hinge Research Institute also shows that firms generating 60% of their leads online are 2X more profitable than those generating less than 20% of their leads online.
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Within the larger inbound marketing methodology, lead generation falls in the second stage. This methodology makes one concept clear:
Consumers have all the power. Lead generation calls for an end to interruption marketing, and it occurs after you’ve attracted an audience and are ready to actually convert those visitors into leads for your sales team.
We call this modern marketing. As you can see in the diagram below, generating leads is a fundamental stop in an individual’s journey to becoming a delighted customer of your business.
You’ll see an example of this flow in the Mechanics of Lead Generation chapter in our free ebook.