Lead generation

Lead generation (commonly abbreviated as lead-gen) is a marketing term that refers to the creation or "generation" of prospective consumer interest or inquiry into a business' products or services. Often lead generation is associated with marketing activity targeted at generating sales opportunities for a company's sales force. Therefore a "lead" is correctly described as information regarding or provided by a consumer that may be interested in making a purchase. Whereas, "generation" is one of many activities that may produce that information and perceived interest.

How lead generation works

The nature of lead generation depends entirely on the decision process of the buyer.

For complex products and services requiring a complex decision process, the keys are identifying the most likely prospects and then educating and qualifying them before deploying more expensive sales resources. The education benefits the buyer; qualification benefits the seller. This gradual lead cultivation process can go on for months and involve several individuals involved in evaluating a solution.

For commodity products, the rendezvous dilemma is one where two parties are seeking each other, but are obscured by time, distance, or attention. In essence there is a set of well-matched candidates for product purchase within a larger set of poorly matched candidates. Those well-matched candidates are what one is seeking to attract or identify in effective lead generation.

Although there are several methodologies and implementations, each involves one of two primary rendezvous strategies: Broadcast or Concentration.

* Broadcast involves communicating to a broad set of candidates with the expectation of a statistical response back to the marketer. Advertising is a classic example of broadcast marketing rendezvous.

* Concentration involves identifying and creating situations that concentrate well-matched candidates into a broadcast-effective set. Market segmentation and trade shows are classic examples of concentration-marketing rendezvous strategies.

Types of lead generation

Lead generation can take on various marketing methodologies:

* Broadcast Advertising
* Direct Mail
* Event or Trade Show marketing
* Seminar or Training
* Publicity and Public Relations
* Whitepapers or Product Literature
* Email marketing
* Web marketing (Search Engine Optimization or other Internet Media buying)
* Telemarketing

Online lead generation

Since 2000, an increasing number of sales organizations have been shifting their direct marketing budgets into the online channel. The internet allows for the development of an extremely targeted lead generation campaign offering geographic, demographic, and contextual targeting services.

Although the online channel is growing extremely rapidly, with search marketing and pay per click (PPC) advertising commanding the bulk of advertisers' online budgets, the demand for highly skilled search marketers remains high. Similarly, a number of software tools (such as bid management software) have emerged, allowing individual search marketers to more efficiently manage their paid search campaigns.

A GP Bullhound Research report states that from 2006- 2007, the online lead generation market grew at 71% YTY - more than twice as fast as the online advertising market. Today, the online lead generation segment is valued at $1.3 billion, and is expected to cross $2 billion by 2008. The rapid growth is primarily driven by the advertiser demand for ROI focused marketing.

To meet the increased demand for online lead generation marketing, the number of publishers offering online lead generation programs has grown exponentially over the last year.

Many types of advertising such as direct marketing, online banners and search marketing are deployed for the purpose of lead generation. However, due to large drop-offs in clicks and conversions, these methods are inefficient.

Opt-in units are the most common types of advertising utilized by the online lead generation advertising. These are ad formats that enable consumers to explicitly opt-in to an advertiser offer without leaving the website on which the ad was displayed.

The most common types of opt-in ad units are:

*Co-registration advertising: The advertiser receives some or all of the standard fields collected by a site during the site's registration process.
*Custom co-registration: The advertiser receives the standard fields collected by a site as well as answers to few custom questions – e.g.- Have you traveled overseas in the last six months?
*Full Page Lead Generation: The advertiser's offer appears as a full page ad in an HTML format with relevant text and graphics. The advertiser receives the standard fields and answers to as many as twenty custom questions that s/he defines.

Pay for performance lead generation

One aspect of lead generation that is gaining ground in recent times is "pay for performance" lead generation. In many ways, this is similar to affiliate marketing in that the lead generation company gets paid only when leads are generated. One of the advantages of this form of lead generation is that an organization can control its sales and marketing spend more closely and pay only for results. In the business to business sector, such lead generation is proving to be quite popular and effective, particularly in the office products category.

Of course, one of the challenges of this form of lead generation is the quality of leads generated, which can be quite subjective. It is incumbent upon companies that decide to opt for this route to evaluate the quality control processes adopted by the lead generators to ensure that they are not only paying on a per lead basis but also on a per quality lead basis.

Lead acquisition

Lead acquisition is one of the most critical activities within the lead generation process. Identifying or attracting a prospective candidate is an expensive and complex task, which becomes even more so if you do not have mechanisms to capture that information for action. The lead acquisition process can take several forms:

* Business card
* Participant scanner
* Inquiry card
* Inbound telephone
* Email
* Web form

ee also

*Sucker list

References

*"The B2B Refinery" by J. David Green & Michael C. Saylor (ISBN-10: 0976864703)
*"Lead Generation for the Complex Sale" by Brian J. Carroll (ISBN 0-07-145897-2)
*"Marketing Management" by Philip Kotler (ISBN 0-13-033629-7)
*"Marketing for Dummies" (ISBN 0-7645-5600-2)
*"The Online Lead Generation Glossary" (http://www.pontiflex.com/download/leadgenerationglossary.pdf)