FREQUENTLY ASKED QUESTIONS

Some select frequently asked questions about lead generation and Growth Orbit.

What is lead generation?

Let’s start with defining what a lead is. A B2B lead is a company that is interested in the product or service you offer. Lead generation is the process of identifying those companies and engaging with them.

What is digital lead generation?

In digital marketing, lead generation focuses on engaging with prospective customers via digital means (i.e., your website, blog post, email, online ads, social media, etc.) Digital marketing-based lead generation typically focuses on providing content that is of value to prospective customers and leads them to declaring their interest in your service by providing you some or all of their information. It is important to note, that even after this engagement the vast majority of contacts that ultimately share their contact information won’t turn out to be qualified leads. These types of leads are commonly called Marketing Qualified Leads (MQLs) and require further engagement and work to turn into actual actionable leads.   

What is content marketing?

Wikipedia defines Content Marketing as “a form of marketing focused on creating, publishing, and distributing content for a targeted audience online. It is often used by businesses in order to achieve the following goals: attract attention and generate leads, expand their customer base, generate or increase online sales, increase brand awareness or credibility, and engage an online community of users. Content marketing can be highly effective. By creating and publishing quality content a business can elevate their status on the internet and organically attack new customers. The challenge with content marketing is that it is time consuming and costly.  Developing, publishing, and promoting enough content to stand out in an ever-expanding world wide web on any given topic is not a trivial exercise. Just look at all the content we have created here for that very purpose!  

What is outbound lead generation?

Outbound lead generation is the process of salespeople or Sales Development Representatives (SDRs), or Business Development Representatives (BDRs) proactively reaching out engage to prospective customers who might not know about your product or service. The goal is to identify companies that have a need for your offering, educate and generate interest in your product or service. Ultimately, through engagement and productive interaction these potential customers develop into qualified leads. This outreach is usually accomplished through a combination of phone calls, email, voicemail, direct mail, and social media interactions.   

While outbound lead generation is commonly thought of as “Cold Calling” or “Cold Outreach”, it can be used as an effective method to qualify Marketing Qualified Leads (MQLs). Leads generated through outbound lead generation are considered Sales Qualified Leads (SQLs) and are generally of much higher value then MQLs.  

Is lead generation a sales or marketing function?

Organizations fight about this all the time. The correct answer is usually both. Lead generation is the function where there is significant overlap between sales and marketing. And there can also be a lot of tension. Marketing organizations usually work super hard to generate mass quantities of content to be consumed by prospective clients. This consumption is managed via digital tools and prospective clients are “scored” and evaluated until they are ultimately defined as Marketing Qualified Lead (MQLs).  These “leads” are then turned over to sales.  But sales organizations have a harder time to reach these new prospects then they expect and ultimately find most are not qualified. Usually, leading salespeople to give up on the effort all together.  

 

High performing organizations ensure MQLs go through an additional qualifying process before they are handed to salespeople to ensure their sales resources only spend their time on highly qualified leads that are most likely to turn into customers.  

What is lead generation vs. demand generation?

When a business starts out or launches a new product or service, the business or product or both are unknown. Demand generation is designed to change that. It brings awareness to your product or service and gives people a reason to learn and get excited about what you are selling. As awareness of your product or service builds, your sales and marketing organizations can step in to engage these new emerging prospects and convert them to leads.  

However, it is important to keep in mind that demand generation and lead generation are not the same thing.  While demand generation can feed your lead generation effort, many of the people or organizations that become interested in your product will not be good prospects. Any new offering will attract interest from competitors, analyst, business students and professors, and/or businesses not suited to buy your offering. So just because your demand generation effort is producing a lot of traffic, there is more work required to validate it is the kind of traffic you seek.  

Why is lead generation important?

Lead generation is important because it is central to how a business attracts and engages with prospective customers and develops those prospects into new customers.  It is the first step in growing any business. The most successful businesses are those that can drive revenue growth a scalable and predictable way.  And the first step in any revenue growth plan is lead generation. 

What is lead nurturing?

It is unusual to convert a new prospect into a customer during your first interaction. Prospects need to time to learn and become aware of your company and your offerings.  At its core, lead nurturing is the process of cultivating these prospects that are not yet ready to buy.  

 

Successful lead nurturing anticipates the journey your buyer will take to learn about your offering in relation to their needs.  The best lead nurturing programs are industry and persona specific, tailoring messaging, resources and selling tools according to the specific buyers needs and step in their buying journey.   

 

Nurturing keeps prospects engaged by providing relevant content (such as blog post, whitepapers, eBooks, and webinars) designed for their situation and stage. If done well, lead nurturing can build strong brand loyalty long before a prospect is ready to buy.  

 

By cultivating prospects early in the buyer’s journey, companies can increase the conversion of unqualified prospects to qualified opportunities and drive more revenue. Nurturing also helps accelerate active opportunities by giving prospective buyers the information they need to make purchasing decisions. Lead nurturing is about helping buyers along in their buyer’s journey. Which is why it’s most effective when triggered by prospect activity or behaviors. 

What is a sales development playbook?

A sales development playbook is a guide that sales development reps use to help them navigate the challenging work required to generate qualified leads.  Without a proper sales development playbook most lead generation efforts will struggle to succeed. A well-conceived playbook will shorten the ramp-up of new hires, improve consistency and productivity across your entire team and serve as a valuable resource as your lead generation programs grows, leans and matures.  

How do I define my Total Addressable Market (TAM) and why does it matter?

Your Total Addressable Market, or TAM for short, is the total market demand for your product or service. It’s the most amount of revenue your business can possibly generate by selling your product or service to every potential customer within your market. Defining and developing your TAM for a lead generation or ABM program requires identifying all the potential companies that could potentially buy your product or service.  If your TAM is not well defined, then your target account data will not be accurate. A poorly defined TAM results in ineffective sales and marketing programs because they are targeting companies that are not a good fit for your business. Forester found that over 1/3rd of all marketing organizations struggle with data accuracy issues.

What is market segmentation and why does it matter?

Most B2B companies today offer products and services that can served a vast array of potential clients. Trying to target every company in every industry vertical and geography with the same messaging, approaches, and materials is likely to be less than successful. Organizations are too varied, with different pain points and buying processes.  Different segments will respond to your sales and marketing efforts differently.  

 

So how do you ensure your sales and marketing efforts are focused on the most productive targets? The answer is market segmentation and data analysis. 

 

Market segmentation is the process of dividing your sales and marketing results across a diverse and varied market data set into a more homogeneous segments.  This can include company size, vertical industry, or geography as examples. Results are further divided into sub-groups based on criteria such as persona, needs, behaviors and attitudes. Performance data is then analyzed at the segment and sub-segment level to identify the most productive segments. Market segmentation is critical to optimizing any sales and marketing effort to maximize your results. 

How much does lead generation cost?

To answer this question, we need to start with the definition of a lead.  Some would suggest that any interaction with any potential customer, even a visitor to your website, counts as a lead. Others would only count those companies that have directly expressed interest and have had a conversation with sales as actual “qualified leads.”  Let narrow this down by defining two types of leads: 

  1. Marketing Qualified Leads (MQLs) are companies that have been attached to your business through some form of marketing activity.  This could include web content, such as blogs or whitepapers, events such as trade shows or webinars, or paid forms of advertising such as Pay Per Click ads or radio or TV ads.   

 

MQLs are generally easier to create, given they are typically generated through automated means (web traffic, PPC, email, etc.), but they are also much less qualified.  A person that clicks on an ad or downloads a whitepaper may be a company too small to buy your product, a student doing a research paper or even a competitor.  You should expect that less than 20% of all MQLs you generate to move forward as qualified opportunities.  And that number may be much smaller.  

 

  1. Sales Qualified Leads (SQLs) are companies that have engaged with your business, more specifically engaged with a salesperson who has confirmed the prospect is qualified, and there is an addressable need.  SQLs require real interaction and if properly qualified will move forward towards next steps in your pipeline at a much higher rate. You should easily expect that SQLs move to next step more than 50% of the time.   

 

Determining the cost of lead generation first requires a determination of what kind of leads are to be generated.  Marketing Qualified Leads can be generated with content, automation and digital tools and thus are lower cost.  These types of leads can cost anywhere from $10 to $500 per lead or more.  MQLs need to be engaged by a salesperson to be qualified and evaluated to move forward and become an SQL.  This process takes time, and resources and thus cost significantly more.  High-quality, Sales Qualified Leads can cost anywhere from $500 on up to thousands of dollars per lead.   

 

In many businesses a seasoned sales professionally, newly hired into an outside sales role can work months to identify, qualify and engage with a new prospect.  In this case, the cost of an induvial lead would be fully burdened cost of that sales rep for the duration of the time they took to develop the lead.  That could be $10,000 per lead or more.    

 

Ultimately, the goal of any lead generation program is to generate the qualified leads you need to support your growth plans at the lowest possible cost. Generating qualified leads at scale involves a lot of variables.  The cost and ROI of an effective lead generation program is ultimately a function of your unique business. The greater the value of a new customer the likely higher the cost to generate quality leads.  

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