Generating Customer Demand and Nurturing Leads & Prospects
8 A Lead Generation Framework
Learning Objectives
By the end of this chapter, you should be able to:
- Explain various types of leads and lead generation
- Describe the key elements of a 5-Step Lead Generation Framework
- Provide examples of how to apply a lead generation strategy
Now, that you understand a variety of digital marketing fundamentals, let’s build on these concepts to generate customer interest, build strong relationships with prospective customers, and ultimately, drive conversions. In this chapter, we will introduce you to a lead generation framework that will outline how to:
- Conduct digital marketing outreach to attract potential customers
- Engage and connect with target audiences
- Nurture and convert prospective customers
What is a Lead?
To kick it off, let’s begin by reviewing some fundamental concepts. A lead is any person who has shown some level of interest in an organization’s product or service. Leads are usually triggered by a communication or marketing activity initiated by the organization. For example, if you have an email newsletter sign up form on your website, after submitting their contact information, a new subscriber would be considered a lead. Once an organization has this contact information, it can continue to communicate and send marketing messages to that lead and hopefully interest them enough to, ultimately, convert and buy.
There are a variety of ways to categorize leads:
- Information Qualified Lead (IQL)
Information qualified leads are contacts who randomly connect with the organization while searching for information. These contacts often share their contact details to get more information, e.g., to download a piece of content. After that, marketing teams can connect with them to share more relevant information to help close the deal. - Marketing Qualified Lead (MQL)
Marketing qualified leads are contacts who have responded to marketing activities but have not explicitly expressed an interest in receiving a sales call. An example of an MQL is a someone who fills out a form on a landing page for a specific promotion or special offer. - Sales Qualified Lead (SQL)
Sales qualified leads are contacts who have taken actions that explicitly indicate their interest in becoming a paying customer. An example of an SQL is a contact who fills out a form to book a demo or to get more information about your product or service. - Product Qualified Lead (PQL)
Product qualified leads are contacts who have used your product and are interested in becoming a paying customer. A common example of PQLs is when organizations offer a free or limited trial of their product or service with the ability to upgrade to a paid premium version. In some cases, this upgrade might involve a sales team. But it could also apply when a trial customer simply asks about paid-only features. - Service Qualified Lead
Sometimes an upgrade might happen as part of conversation with a customer service representative. When this happens, it can be referred to as a Service Qualified Lead, especially if it is not possible for the customer service representative to upgrade the customer and requires the involvement of the sales team.
As you can see from the above examples, there are many types of leads and most organizations will try to attract as many qualified leads as possible, which brings us to lead generation.
Lead generation is the process of getting leads or attracting and converting target audiences who have shown an interest in your product or service. The following is a lead generation framework to help you identify, attract, nurture, and convert leads into paying customer.
The five steps in the 5-Step Lead Generation Framework are:
- Define Your Target Audience
- Set Your Organizational Goals & Objectives
- Develop Content / Lead Magnets
- Nurture & Close Your Leads
- Get Customer Referrals
In the following chapters, we will dive deeper into key digital marketing tactics and activities that support this framework. However, in this chapter, we will first define and explain each of these key steps.
Step 1: Define Your Target Audience
As already discussed in the Target Market and Audience, Customer Personas, and Customer Journey Mapping chapters, a key component to any marketing strategy is clearly defining and identifying your target audience(s). Before starting any lead generation activities, make sure you have captured all the specific details and differentiators related to your target audiences. This will significantly help in focusing your marketing activities and knowing exactly where to spend your time, budgets, and organizational resources.
Let’s first start with market segmentation, which we discussed in our Target Market and Audience chapter. Just to remind you, market segmentation refers to segmenting or grouping prospective buyers into different segments based on shared characteristics. These characteristics can include demographic, psychographic, geographic, or behavioural attributes.
Many of the attributes listed in the Target Market and Audience chapter can be easily applied to individual consumers. But, in the B2B space, market segmentation can look somewhat different. For example, segmenting your target audience might start by highlighting the following attributes for a target organization:
- Industry
Which specific industries are you targeting? - Location
Are you targeting a specific geographic location? - Organization Size
- Size of revenues or net profits
- Number of employees
- Transactions
- Number of transactions
Does the target organization have millions, hundreds, or tens of transactions per year? - Frequency of transactions
Do your target customers have transactions daily, weekly, every six months, etc.? What does their sales cycle look like, i.e., how long does it take them (not you!) to close a sale? - Value of transactions
On average, how much is each transaction?
- Number of transactions
- Usage
Usage refers to usage of your service or your product- Heavy, medium, light
Is your target customer’s usage heavy, medium, or light? Do they use it once a month, every week, or every day? - Complementary products / services
Are there any complementary products and services our customers tend to be using, e.g., ERP, MRP, accounting, payment, point-of-sale (POS) services that we should integrate with?
- Heavy, medium, light
- Time in Business
How long have they been in business?
B2B Target Customer Examples
Here are two potential B2B target organization descriptions:
- Your target organization might be an organization with:
- 10+ years in business,
- in the technology industry,
- in Canada,
- with revenues over $1 million,
- with average transaction values between $7,500 – $15,000 (less than 100 transactions per year)
- using Workday or SAP, and
- with medium-to-high usage of our enterprise solutions
- Or maybe, your target organization is an organization with:
- less than 3 years in business,
- located in Winnepeg,
- with less than 5 employees,
- ~$50,000 in revenues per year,
- with average transaction values between $2 – $7 (~10,000+ transactions per year)
- using QuickBooks, Paypal, and/or Square for accounting and payment services
- with high usage of our small-to-medium-sized business (SMB) solutions
Please note that it is quite common to market to and support multiple target audiences. For example, an organization might know that ABC are the characteristics of their enterprise and larger customers and XYZ are the characteristics of their smaller / SMB ones. However, understanding these differences allows an organization to better support and direct prospective customers when they express an interest. Because depending on which type of customer they are, there may also be a significantly different customer journey. For example, an organization might qualify Acme Company as an “enterprise” company and will treat them in an “enterprise” way. Whereas Jitters Coffee Shop will qualify as a small-to-medium-sized business, so they are treated in a different manner.
Reflection
Think about your primary target audience. Who do you really want to target?
If you have multiple target audiences, try to focus your efforts on your primary target audience and keep your target audiences to less than 4. Otherwise, your marketing tactics and activities may become too broad, diluted, and ineffective in meeting the specific needs of your target audiences.
Step 2: Set Your Organizational Goals & Objectives
After clearly defining your target audience, most marketing strategies require setting up specific goals and objectives. What does your team / organization want to accomplish? Do you want to:
- Increase product or service adoption (revenues)
- Identify new customers
- Build brand awareness
- Reduce the number of customers leaving (churn)
You want to ensure that your targeted audiences can help achieve the goals and objectives for your organization. When setting your goals and objectives, consider:
- Any internal timelines,
- Specific benchmarks or KPIs you want to surpass,
- Challenges you have already encountered,
- Parameters such as industry regulations, internal protocols, and data privacy permissions,
- The scope and infrastructure of your internal data and databases, and
- Financial budgets and human resources for ongoing experimentation and updates to your customer personas
A key consideration in developing your goals and objectives is thinking about what you want your prospective customers to do; try to be as specific as possible. For example, you might have primary and secondary conversion goals as follows:
- Primary conversions
- Purchase
- Donate
- Secondary conversions
The goal of most secondary conversions is to get prospective customers’ contact information so marketers can continue to communicate with them and hopefully, convert them later. When prospective customers sign up and provide contact information, not only do organizations get prospect’s contact information, organizations also now know which topics interest that prospective customer. This allows the organization to send targeted communications, promotions, and events that relate to these topics and to further engage leads around the topics that they have expressed interest in. For example, if someone signs up for a webinar, a marketer might send a follow-up case study, product or service promotion, or market research related to that webinar at a later date. Here are several common examples of secondary conversions:- Sign up / provide contact information for:
- Free or Limited Trial
- Webinar / Demo
- Newsletter
- Downloadable content, e.g., whitepapers, research, etc.
- Sign up / provide contact information for:
- Tertiary goal (not a conversion!)
- Brand awareness and exposure
- Specific KPIs and Targets
Also, be sure to set specific and measurable key performance indicators (KPIs) and targets for your marketing activities. For example, how many purchases do you want to get? Or how many people do you want to sign up for your newsletter or to attend your webinar?
Please note that you can (and should) have more than one goal. Remember the purpose of any lead generation strategy is to acquire as many leads as possible, ensuring that those leads support the overarching goals and objectives of the organization. Do make sure your goals support one another and are in alignment with any organizational goals. The main purpose of setting your organizational goals is to test and validate that your target audience can deliver on those organizational goals and objectives. And if you do not set specific goals and objectives, how will you know if your actions have been successful or not?
Step 3: Develop Content / Lead Magnets
After you have defined your target audience and set your organizational goals, you can start thinking about creating content to attract your target audience and to achieve your goals and objective. A common marketing strategy to accomplish this is by using lead magnets. A lead magnet is a free item or service that is given away for the purpose of gathering contact details. For example, maybe your organization has created a downloadable piece of content like a checklist. To access it, people must fill out a form with their contact information, e.g., their name, email address, job title, organization, etc., which as mentioned earlier, can be used to communicate with and market to them later.
There are many different kinds of lead magnets and most organizations will use some combination of the following types of lead magnets:
- Educational lead magnets
Educational lead magnets teach your target audience something they do not already know. This can be in the form of a newsletter, webinar, white paper, or downloadable PDF.
- Useful lead magnets
Useful lead magnets provide resources or tools that can help your target audience solve a specific problem or pain point, e.g., a tutorial, checklist, ROI calculator, or other tool. - Community-building lead magnets
Community-building lead magnets create a way for your target audience to be part of a community based on the things they have in common, e.g., direct challenges and group forums. - Entertaining lead magnets
Entertaining lead magnets, primarily used in B2C markets, inspire or entertain your audience, e.g., quizzes, videos, etc. - Bottom-of-funnel lead magnets
Bottom of funnel lead magnets “push” the prospect from a lead to customer, e.g., free trial, discount codes, free consultation.
Connecting these to our conversion funnel, bottom-of-funnel lead magnets move potential customers (leads) from engagement to conversion.
The primary goal of lead magnets is to identify the specific interests of your target audience. In our Content Marketing chapter, we will delve into lead magnet types in more detail.
Step 4: Nurture & Close Your Leads
Once you have identified the specific interests of your target audience, it is now possible to build ongoing, engaging relationships around those interests and ultimately, encourage your target audience to convert. Lead nurturing and closing is generally a key component of an organization’s sales activities and often will be carried out by the sales team.
That said, as customers increasingly consume information, videos, and other “self-serve” content online, this online content coupled with the promotional activities from the marketing team may lead customers to convert on their own, without any person-to-person sales interaction. In these cases, the conversion stages from awareness to conversion may be entirely handled by marketers. This type of sales process is often referred to as inbound sales. The purpose of inbound sales is to organically attract, educate, inform, nurture, and guide leads through the purchase decision-making process. In contrast, outbound sales focus on approaching prospects and delivering a sales pitch to trigger interest, e.g., cold calls, cold emails, or door-to-door visits.
Regardless of an organization’s inbound or outbound sales strategies, the following recommendations represent several common ways to nurture and close leads:
- Targeted content
Tailor intriguing, entertaining, and valuable content to target audience members so you can identify the most qualified leads. - Multi-channel lead nurturing
Reach and nurture your audience where they are — on multiple channels! Don’t just stick with one channel. Explore a combination of both online and offline marketing channels. - Multiple Content Types
Boost your touchpoints with a mix of content types to increase your interactions and engagement among target audience members. - Timely Follow Ups
Follow up with your leads in a timely manner to keep them engaged and interested as well as to keep your brand top of mind. With the many new marketing automation tools, it is now possible to automate follow ups and ensure that leads get consistent, appropriate, and ongoing messages. Marketing automation will be discussed in more detail in both the Content Marketing and Email Marketing chapters. - Personalized Communications
Personalize your messaging (and all lead nurturing tactics, when possible) to promote customer conversions. - Lead Scoring
Lead scores are used to determine the likelihood of conversion for a particular prospect based on specific characteristics. These characteristics stem from the customer personas and customer journeys created, which highlights why these activities are valuable. When used properly, a lead scoring strategy can help an organization determine which leads to focus on and which ones may be a waste of time.
Sales and Marketing Alignment
Regardless of your sales strategy, inbound or outbound, it is critical to align your sales and marketing teams to improve your lead nurturing tactics and to boost customer conversions. Ideally, the two teams should work together to accelerate customer conversions and to ensure that the organization is meeting the needs of prospective customers at each and every stage of the customer journey. Because if marketing does a poor job qualifying leads, the sales team has an even harder job converting and closing them.
Step 5: Get Customer Referrals
Often, organizations focus on increasing inbound leads, outbound leads, website visits, or demos. But spending more time getting existing customers to tell others to buy their products or services can lead to better qualified prospects and usually close sales much more quickly. This is because people tend to listen to other customers, clients, or even random people more than they listen to marketing messages from an organization. In fact, here is an article with over 80 referral marketing statistics showing why customer referrals are so valuable. Even in the B2B space, customer referrals are important because B2B organizations often have highly connected, small target audiences.
So, how do you get your customers to give you referrals, recommend your products and services, and/or be an advocate, brand evangelist, or an influencer? Here are some suggestions:
- Exceed Customer Expectations
Not only do you need to deliver an outstanding product or service, but you also need to provide exceptional post-purchase support. - Engage Your Customers
Stay engaged with your customers so that your brand remains top of mind. This ensures that when an opportunity arises, your customers will think to mention your brand. - Be Share-worthy
Give your customers something to talk about and share. And make it easy for them to share the news, update, or promotion. This can be done by providing templates and recommending wording, images, etc. - Create a Customer Referral Program
Reward your customers for spreading the word. But, be sure to align your rewards with their interests, motivators, and drivers. For example, there are many different reward options:- Monetary, e.g., 5% off for you and/or your referral, free annual renewal for you, or $100 per referral, etc.
- Products, e.g., offer a free iPad or specific tools that your target audience uses and values
- Donations, e.g., for every referral, $50 is donated to an environmental charity or other cause-based initiative
- Personal Recognition, e.g., you and your referral will be featured on our website, in our newsletter, and/or on our social media channels.
When creating your customer referral program, think about which rewards (or combination of rewards) your customers will find most beneficial and valuable. Some organizations might be surprised to find that monetary incentives are not as important to their customers as some of the other options listed above. That said, the key to referrals is to ask for them! Here are a few types of referrals to consider:
- Word-of-Mouth Referrals
- Online Reviews
- Social Recommendations & Sharing
- Email Referrals
- Incentive-based Referrals
Once you have gone through the five steps of this lead generation framework, you will want to repeat the steps and go back and ask: are the customers we are connecting with and converting, the same as our target audience? You will also want to compare and evaluate that they are the ones that make the most sense to target. Using this customer data, you may need to tweak and adjust your target audience and customer personas to make sure that they truly represent the customers you are actually serving and that they are the most appropriate customers for your products, services, and solutions.
To successfully create a targeted and sustainable lead generation strategy:
- Define and identify your target audience(s)
- Set your lead goals, objectives, and targets
- Choose the types of lead magnets for your target audience(s)
- Review your lead nurturing and closing strategies
- Develop or improve your customer referral program(s)
Key Takeaways
In this chapter, we learned about leads and the lead generation process.
- A lead is any person who has shown some level of interest in an organization’s product or service.
- There are a variety of ways to categorize leads:
- Information Qualified Lead (IQL)
- Marketing Qualified Lead (MQL)
- Sales Qualified Lead (SQL)
- Product Qualified Lead (PQL)
- Service Qualified Lead
- Lead generation is the process of getting leads or attracting and converting target audiences, who have shown an interest in your product or service.
- A lead magnet is a free item or service that is given away for the purpose of gathering contact details.
- The purpose of inbound sales is to organically attract, educate, inform, nurture, and guide leads through the purchase decision-making process. In contrast, outbound sales focus on approaching prospects and delivering a sales pitch to trigger interest, e.g., cold calls, cold emails, or door-to-door visits.
- The 5-Step Lead Generation Framework includes the following steps:
- Define Your Target Audience
- Set Your Organizational Goals & Objectives
- Develop Content / Lead Magnets
- Nurture & Close Your Leads
- Get Customer Referrals
Lead Generation – Additional Resources
Here are some additional lead generation articles and videos:
Media Attributions
- Lead generation by Sunit Nandi is licensed under a CC BY-NC-SA 4.0 licence.
- 5-step lead generation framework by Rochelle Grayson is licensed under a CC BY 4.0 licence.
- Conversion funnel by Rochelle Grayson is licensed under a CC BY 4.0 licence.