Internet Leads

 Introduction

    Lead generation is the act of collecting contact information of people who are interested in a product or service.  This information is called a lead and it’s regarded as a high value sales opportunity. Often, companies that engage in this practice sell the contact information to other companies that can sell the product or service.  In 2007 US companies spent an estimated $1.6 Billion on Lead generation, a 23% increase over 2006[1]. 

What differentiates Online lead Generation?

    Many marketers are interested in lead generation because it is ROI based spend.  As marketing departments are more and more goaled to accountability [2]lead gen offers the ability to tie revenue and profit to spend.  The abundant amount of information available on the internet also allows companies to intelligently optimize their campaigns.  A company can spend $10,000 on 10 campaigns for a quarter, track the results and then allocate $50,000 to the two highest performing campaigns the next quarter.  To learn more about ROI based marketing click here.

    Many companies are spending less money on traditional Lead generation methods (direct mail, telemarketing, event marketing) and spending that budget on internet leads.  Businesses like the faster transfer times, targeted messaging, higher conversion rates, and ROI based spending.

Faster Transfer Time-Technology allows internet leads to be transferred to a sales rep much faster than other leads.  By using a real time delivery method a lead buyer can literally call a lead within seconds of submittal.  With direct mail it can take days to get lead information and an event planner will take at least a day to get lead information to a sales team.  Obviously you want to contact your prospects when they are thinking about your product, rather when they are trying to eat dinner or watch TV.

Targeted Messaging- Because so much data is being transferred on the internet (cookies, user profiles, etc) it is much easier to make sure the right people see your lead generation advertisement.  [3]Only in the online space can decide you only want your ad to only be seen by college educated males 18-30 who live in the Midwest and enjoy soccer.  With this ability to target comes the opportunity to gear your message to multiple niche audiences so prospects see and hear what they want to see and hear instead of everybody getting the same broadcast message.[4]

Higher conversion rates- Because leads are transferred faster and ads are better targeted your sales force will be more likely to turn leads into customers.  Higher conversion rates allow you to save money, increase productivity or both. 

     In its early days lead generation has got some negative publicity from businesses built on deception.  The industry was pioneered by companies that used banner ads that present attention grabbing questions (see photo for example) to generate traffic.  When users click on these ads they are sent to a page that informs them they have won a cool prize and to claim it they must simply fill out a few forms.  The user is then bombarded with an endless stream of lead forms so long that almost nobody fills out enough to claim the prize.  This practice of promising rewards for filling out forms is called incentivized marketing and has been shunned by reputable lead generation firms. (see ValueClick case).

 

Three tips for beginners

(1) An offer that requires less commitment will have a higher the response rate, but the leads will be at an earlier stage in the buying process.

A low commitment offer carries a low perceived risk in the eyes of the inquirer, and a high perceived value. Therefore, they tend to get a higher response rate, but it will be more difficult to convert these leads into customers. Examples of low commitment offers:

Best Practice: Use this when your sales channel is prepared to do some hand holding.  Usually these kinds of leads should be given to sales team that has a low-pressure, informative style so you don’t scare off too many potential customers.  This requires more work than buying hot leads, but it allows you to reach consumer who probably would not have bought your product otherwise.

(3) Empathize with your target audience.

Put yourself in the shoes of a prospect and think about what would make you want to buy your product.  This is where many marketers get lazy and engage in wishful thinking.  One of the differentiators between great marketers and good marketers is the ability to be deeply passionate about your brand yet at the same time retain the ability to put yourself in the shoes of a person who doesn’t know much about your business and doesn’t care about your brand. [5]

Takeaway: Before pursuing internet leads, clearly define the stage in the buying cycle you want to target, as well as the appropriate audience. Then, pick advertisements that correspond to that buying stage and are also attractive to your audience.

See Also