Lead generation is essential for business growth. After all, it’s how you fill your sales funnel with prospects. But to be effective, you have to understand lead generation and the various types of marketing strategies that will help fill your sales funnel.
That’s what we are going to cover today! So let’s dive in so you fully understand how to find new prospects, nurture them to become customers and grow your sales and business.
What Is Lead Generation?
Let’s start with a working definition of lead generation.
Lead generation is the process of attracting prospects to your business and increasing their interest through nurturing, all with the end goal of converting them into a customer.
With that definition in mind, let’s break it down:
- Lead: As this definition implies, leads are prospects, not just any prospect—they are the kind of people interested in your product or service that could one day become a paying customer.
- Generation: As this definition indicates, generation is a process that involves attracting, nurturing, and converting these prospects into customers.
Various research has found that:
- B2B companies with mature lead generation processes enjoy 133% more revenue than average companies.
- Nurturing leads can increase sales by 50%.
- Generating more quality leads is a priority goal for 79% of marketers worldwide.
But lead generation isn’t simple. For example, 61% of marketers say their biggest challenge is generating traffic and leads.
So, if you’re struggling too, you’re not alone! We hope that the information we provide in this article will help you get on track to more prospects and sales!
Introducing the Sales Funnel
So, we have this somewhat vague marketing concept called ‘lead generation.’ But how does it work? What does it entail? Don’t you wish you could visualize it to understand it better?
Well, you can—it’s called the sales funnel.
Sales funnels are a way to visualize the journey that a lead goes through as they make their way through the lead generation process, from cold prospect to paying customer.
It is depicted as a funnel with the wide end at the top and the narrow end at the bottom, divided into three distinct sections, known as:
- Top of Funnel (TOFU)
- Middle of Funnel (MOFU)
- Bottom of Funnel (BOFU)
Your goal throughout the sales funnel is to move your target audience through the funnel until they become paying customers.
Let’s dive into the funnel sections so we better understand what happens within each and what your goals should be.
Top of Funnel (TOFU)
The top of the funnel represents people in the awareness stage of your lead generation process. At this stage, they have their first interaction with your company and are learning about who you are and what you offer.
Some of the marketing strategies that attract prospects at the TOFU stage include:
- Blog posts
- Social media posts
- Content marketing
TOFU is rightfully the most significant part of the funnel because, at this point, you are working with the broadest, most general audience.
Unfortunately, they are also the least ready to convert into customers—after all, they just met you!
Therefore, your goal in the TOFU stage is two-fold:
- Create Trust: Establishing trust is a top priority because only if the prospect trusts you will they feel comfortable moving deeper into the funnel. You can establish trust by sharing top-quality content (blog posts, social media, etc.) that demonstrate your knowledge and authority on the subject.
- Qualify Leads: It’s also your job to qualify (and disqualify) leads at this stage of the funnel. Of course, this happens throughout the sales funnel, but it’s essential to get started in the TOFU stage. You don’t want everyone moving on to the next part of the funnel—only those who may be genuinely interested in purchasing your products or services. You can qualify leads by making sure the content you create is specific to your target audience, so those who aren’t in this particular group will see their way out.
Middle of the Funnel (MOFU)
The middle of the funnel (MOFU) represents the consideration stage of your lead generation process. At this point, a prospect has clearly defined their problem and is looking for potential solutions. Your brand is being considered as one possible option.
Some strategies in your marketing efforts to attract leads at the MOFU stage include:
- Lead magnets (downloads)
- Educational resources
- Promotional materials
- Email marketing (nurture emails)
You are working with a smaller group of prospects at this stage because you have moved any non-qualified prospects out of the funnel. This is why the middle of the funnel is more narrow than the top of the funnel.
Your goals in the MOFU stage are:
- Education: A MOFU prospect is in research mode, trying to find out how they can solve their problem. You’re still building trust with them, and you can do that by providing more in-depth and targeted educational resources like lead magnets and webinars.
- Positioning: As a business, you are trying to set the MOFU prospect up to become a paying customer. Part of that means positioning yourself as an expert in the subject area and positioning your company as the solution to their problems and challenges.
Bottom of the Funnel (BOFU)
The bottom of the funnel represents people in the decision stage of the customer journey.
At this point, your prospects are highly qualified and have reached this part of the funnel because they are an excellent fit for your products and services.
Also, leads at this stage have done their research and are ready to make a purchase. They are likely comparing you to other businesses that have made their ‘shortlist.’
Some strategies in your marketing to persuade BOFU leads to choose your products or services include:
- Case studies
- Customer stories
- Email marketing (sales emails)
You’ll notice that this part of the funnel represents a smaller group of leads because they are the most qualified and primed for conversion.
Your goals at the BOFU stage are:
- Differentiation: The BOFU lead is considering several options right now. It’s your job to show them how you differ from the competition and why you are the best option in the market.
- Personal Touch: At this point, the BOFU lead is likely ready to talk to you. It’s up to you to give the personal touch that helps them understand what it is like to be your customer. You can offer them the chance to experience your solutions firsthand through demos, trials, and consultations, or vicariously through case studies and testimonials.
Outbound Marketing vs. Inbound Marketing
As we have explained above, various marketing methods are used at the different sales funnel stages.
That leads us to discuss two other buzzwords in lead generation—outbound marketing and inbound marketing.
First, some definitions.
When we talk about outbound marketing, we are talking about traditional marketing methods where you (the business) initiate contact with the prospect as you try to push your message out to potential customers.
Cold calling is the most notorious example of outbound marketing. However, it also includes cold emails, trade shows, advertisements, billboards, direct mailing, etc.
Outbound marketing aims to push the message out far and wide, hoping it resonates with some who hear it.
When we talk about inbound marketing, we are talking about marketing methods aimed at drawing people in, where the prospect initiates the contact.
Inbound marketing techniques include blogging, social media, content marketing, lead magnets, and opt-in emails.
Instead of pushing the message on the prospect, with inbound marketing, you put the information out there and let those who are interested come to get it.
What Type of Marketing Works Better?
It is important to note that both outbound and inbound marketing can be used in lead generation.
However, marketers are starting to realize the benefits of using inbound techniques instead of the traditional outbound marketing strategies. Why?
Because, as a society, we are sick of being ‘marketed to.’
People have grown used to the traditional outbound techniques and now are trained to tune them out.
That is why, as research shows, inbound marketing works better. Check out these stats:
- Properly executed inbound marketing is 10x more effective for lead conversion than outbound marketing.
- Inbound practices produce 54% more leads than traditional outbound practices.
- Inbound leads cost 61% less on average than outbound leads.
- After five months of consistent inbound marketing, the average cost per lead drops 80%.
In summary, inbound marketing pulls prospects in by solving their problems. It allows them to interact with your content and for you to build trust.
8 Steps to Get Started with Lead Generation
Hopefully, you realize the importance of engaging in lead generation to build your business by now. But how do you get started?
Here are eight steps you can follow to get started
1. Define Your Target Customer
First, you’ll want to know who you are trying to target with your lead generation efforts. For example, who is currently buying your product? Who is visiting your website? What does your ideal customer look like?
Research to get insight into your target customer, which will inform and influence the rest of your lead generation efforts.
2. Define Your Goals
Approach lead generation with strategy in mind by setting your goals upfront. What are you trying to achieve? An increase in leads? A boost in sales? Growth of a particular product?
Be as specific as you can when defining your goals so that your content is more focused on a particular result.
3. Choose Your Channels
You’ll need to decide which marketing channels you want to focus on. After years of experience in digital marketing, we know that blogging is a must.
But what else will you do?
Are your customers on social media? Which platforms? Do they prefer to be contacted by email or with print marketing? Do they enjoy apps? Do they listen to podcasts?
Figure out what your audience likes so you can choose the appropriate channels to focus on.
4. Create Engaging Content
Now that you know where you will do your marketing, it’s time to create engaging content that will draw people in. What topics is your audience interested in? What problems do they have? What challenges do they face? Use this information to create content (blog posts, social media posts, podcasts, etc.) that draws prospects to the top of the funnel.
5. Build a Database
The point of creating engaging content is to build trust, so prospects are willing to give up a crucial piece of information: their email address. What content can you create for the middle of the funnel that will help you build your database? Think of lead magnet ideas such as worksheets, templates, checklists, eBooks, etc.
To help you get started filling your sales funnel with high-quality leads, we created The Ultimate Guide to Creating and Promoting Lead Magnets. With this guide and workbook, we’ve taken the guesswork out of building a lead magnet, so you’ll know exactly what to do, how to do it, and why.
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6. Nurture Your Leads
You got a prospect’s email address. Is it time to jump into the sale? Not likely.
Remember that these new contacts are probably still in the MOFU stage where they are trying to understand the possible solutions that exist, not the BOFU stage where they are ready to make a purchase decision. Therefore, you need to nurture these leads so you can build trust.
Think of creative ways you can continue to build this relationship.
7. Make the Sale
After nurturing, it’s time to move into the sale by sending sales emails or assigning leads to the sales team, who will follow up personally.
Be sure to provide the necessary BOFU marketing materials that will help sway their decision (free trials, consultations, testimonials, etc.).
When a sale is achieved, let the customer service team take over, answering questions, offering support, and providing the new customer’s needs to get the maximum benefits from your product or service.
8. Monitor the Process
Each step of the process should be monitored so you can adjust where needed. What analytics will help you evaluate the success of each stage? How will you adjust if things aren’t working?
Data is your best friend for lead generation and sales conversion. So make sure you watch your metrics to determine what is working and what isn’t.
Lead generation is something that every business needs to be engaged in. Having a healthy sales funnel means having processes that bring people into the funnel and move them along the path to becoming a paying customer.
And lead generation is a lot of work.
As a business owner, your role should be to guide and oversee the efforts, not to do the nitty-gritty work of creating content, lead magnets, and emails.
Your time is valuable and better spent on overall business strategy while trusted experts do the bulk of the lead generation work.
Are you looking to find the right partner to help you with lead generation? Learn how we can help by checking out VirTasktic services here.