How to Optimize Lead Generation


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This white paper discusses why small businesses are experiencing a decline in lead volume and quality, and acts as a step-by-step guide for lead generation in "the new normal".

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How to Optimize Lead Generation

  1. 1. Optimize Lead Generation with EffectiveBusiness Tools and ProcessesLead volume and quality is down for many SMBsdue to our slow global economy and an uncertainnear term economic outlook. Even thoughinterest rates are low, many banks aren’t lending.Unemployment remains high in many economies.Surveys like the COSBOA reveal that only 23%expect the economy to improve in 2012. These arevariables that business owners cannot control.© Hoover’s, Inc. 2012. All rights reserved.
  2. 2. TABLE OF CONTENTSi. Introduction 02I. Lead Generation Begins by Defining Your Target Market 03 Lead Generation Requires aII. Comprehensive Commitment to Enter the 24/7, Multi-Channel, 05 Multiplex Digital World Create and Master the LeadIII. Conversion Funnel 07 Effective Tools and TacticsIV. for Lead Generation 09V. Getting the Most from Your Lead Generation Efforts 11VI. Resources 12 1© Hoover’s, Inc. 2012. All rights reserved.
  3. 3. INTRODUCTIONIf you’re a SMB owner you have to congratulate yourself – you’re still in business after the worstfinancial crisis in a generation. The crisis taught you many things, including the value of keycustomers, positive cash flow, and loyal employees.For many SMBs you now have a new crisis – the crisis of a dwindling stream of qualified leads.Lead volume and quality is down for many SMBs due to our slow global economy and an uncertainnear term economic outlook. Even though interest rates are low, many banks aren’t lending.Unemployment remains high in many economies. Surveys like the COSBOA reveal that only 23%expect the economy to improve in 2012. These are variables that business owners cannot control.Lead Generation - The New Normal Now is the time to rethink your lead generation perspective and discover a new vocabulary of lead generation - leadAnother reason for lower lead volume is within your scoring, lead nurturing, email marketing campaigns,control. It has to do with SBM trying to generate leads in landing pages, white papers, the buying process ofways that no longer work, ways that are no longer credible. customers, social media strategies, the sales funnel, andSingle and discreet email campaigns are stand alone more. Even slight changes in tools and processes canand have limited impact. Also, relying on salespeople to result in dramatic benefits to your business.generate most leads is not a good use of your sales asset.Marketing cannot be satisfied that its job is done onceleads are found and handed off to sales. Sales must follow Step by Step Guide to Lead Generationthrough efficiently on qualified leads. A key to generating In this white paper you will learn the following about leadand selling to leads more effectively is a new commitment generation:to your lead generation strategy and to mastering newtechnologies and tools. • Why defining your market as a first step increases the payoff of any lead generation effortThis change in strategy is not as easy as it seems. Leadgeneration can be a big challenge for many businesses. • Why having a conversion sales funnel that matchesThe new normal of lead generation can seem like a maze the buying process is a key part of creating anwith unclear directions for getting the lead and the sale effective demand generation systemor an obstacle course with new technologies, tools andconcepts that you need to master. The process is dynamic • Why your lead generation strategy needs to adapt toso just when you get it figured out it changes again. new best practicesTo effectively take control of your lead generation efforts • The most effective tools available for lead generationrequires changing your perspective and strategy. This • How to maximize the return on your lead generationstarts by taking an honest assessment of the investments effortsyou make in lead generation, understanding how leadsare generated and knowing the effectiveness of thosestrategies and tactics. With this new perspective, the roleof technologies and tools becomes clearer. Even morefundamental is the need for the right perspective on thestrategic importance of generating leads. 2© Hoover’s, Inc. 2012. All rights reserved.
  4. 4. I. LEAD GENERATION BEGINS BY DEFINING YOUR TARGET MARKETThe more things change the more they stay the same. Getting the most from any lead generationinvestment still has to begin by defining your target market.If you’re a veteran marketer you probably learned this early in your career or while attending college.If you’re in sales you might have learned it as the ‘ideal customer’ concept. Defining your targetmarket is a combination of identifying the companies you want to sell to and the people in thosecompanies that will make the decisions to buy your product or service.For example, if you sell to the healthcare market which part of it is your focus? Is it the medical devicecompanies? Healthcare networks? Pharmaceutical companies? Biotech? Research facilities? If yourmarket is medical devices can you narrow it further? Some companies specialize in products such asinfusion pumps and drug delivery. Others specialize in devices used in an oncology setting like the safetransfer of toxic chemotherapy drugs. Others specialize in devices used in the operating room arenalike surgical or anesthesia equipment, lighting and tables, or disposables used in surgical procedures.The better you define the market the more effective you will be in the next part of this exercise – whichis identifying the stakeholders who participate in the buying process.Defining and Grouping Key Stakeholders by One thought leader who puts a high value on knowingUnderstanding the Buying Process your target market is Brian Carroll, Executive Director of Research at MECLABS and author of the gold standardDefining the executives that are key stakeholders in the book “Lead Generation for the Complex Sale”. The costbuying process for your products or services starts by first of deploying a sales team to work on low potential leads isidentifying the buying process itself. For example, the too high. Marketing has to continuously improve the qualitysales team for a manufacturer of an infusion pump system of the leads it hands off to sales and sales must continuallylearned in selling to one hospital that the stakeholders in improve the conversion of those leads. Carroll says thatthe buying process were divided into two groups. One this step is critical to getting a higher return on your leadgroup of stakeholders was comprised of administrators generation investment. He says, “It’s better to spend $25who were more interested in lowering costs. The other on a verified name than to have your salesperson call thegroup was comprised of clinicians such as nurses and wrong people.”doctors who were more interested in getting key featuresand benefits that would improve usability or patientoutcome, even if the solution was more expensive. For a Tailor Your Message to Each Call Pointcompany that considers the purchase of a CRM solution Finally, your message and approach needs to be tailored(customer relationship management) the vice president to each call point. The CEO has a longer term perspectiveof sales could be a key stakeholder if their sales team and wants to know the financial impact of any investment.will be the primary users of the product. The CEO might He also needs to know how an investment fits with theget involved in purchases where the dollar value of the strategy he has set forth with the team. On the otherinvestment is large. He or she might even need to get the hand, selling to the CEO’s directors might mean yourapproval for the purchase from the board of directors. message should address concerns and issues at theKnowing these buying process dynamics helps you target department level or virtual team. They want to know howthe right stakeholders. your solution will make the team more effective, sell more, 3© Hoover’s, Inc. 2012. All rights reserved.
  5. 5. or help reduce cost. A CFO might be focused on returnon investment or getting favorable terms and conditions. Stakeholders today areA CIO is concerned about integration of processes andcapacity of his team. A nurse on the floor wants the looking for signs that youproduct to work reliably and accurately every time. know and understandIf you don’t tailor your message to the individual audienceyou run the risk of coming across as lacking credibility their business.and not understanding their needs. Since a complex sale has multiple stakeholdersKnow the Problems You Can Solve with Your participating in the buying process, and they each have a unique perspective on the situation you might thinkProducts and Services it’s impossible to create a customized message for eachThe volume and quantity of leads you generate is person. Organizing the stakeholders into groups withdetermined by how well you communicate your similar interests and perspectives simplifies this task.understanding of customer needs and your capabilitiesin solving them. When your messaging connects, the For example, many C-level executives invested inaudience believes you and finds you credible. That CRM solutions to improve productivity in their salescredibility is always earned and continually tested each organizations. However, the return on these investments istime a customer connects with you. sometimes missing. Regarding his six-figure investment in a CRM system the CEO of one company in the creditYou might understand a market’s needs because you industry impatiently asked his executive staff “where’s myalready service and sell to customers in that market. As return?” If you go back to the point where he participatedyou try to expand to other companies the stakeholders will in the purchase of this system you’ll find that he approvedbe looking for signs that you understand their business. the purchase because he believed it would deliver return.Some companies have used case studies to demonstratetheir understanding and capabilities. One common The CEO’s staff with lower titles might have a differentapproach is to have a ‘Customers’ tab on the home page. perspective on the situation. For example, someone in ITThis lets prospective customers immediately see how might be more interested in security of the CRM and thetheir peers and other companies have used your services support they get from the software vendor. They mightand how they might similarly benefit. A company in the want to know how they can generate reports faster orconsulting services business has organized its website with less effort, or both. A salesperson using the CRM isby the problems it solves. This makes it very easy for interested in how easy it is to get into the system to enterprospective customers to begin to engage in a digital data and run reports. A sales manager wants a systemconversation. that minimizes time out of the field for his sellers. He wants them to be in front of customers and prospects as much as possible.Understand Needs for eachStakeholder GroupYou might have to learn about needs by doing research onthe industry. You might not need to know intimately abouteach executive’s situation – that’s what questions andsales calls are for – but you have to demonstrate quicklythat you know enough about the market they sell to, andgrasp the problems and obstacles that challenge theirsuccess. 4© Hoover’s, Inc. 2012. All rights reserved.
  6. 6. II. LEAD GENERATION REQUIRES A COMPREHENSIVE COMMITMENT TO ENTER THE 24/7, MULTI-CHANNEL, MULTIPLEXED DIGITAL WORLDFor many years reaching a target audience meant running an ad on television or radio or in print.These were the primary and dominant channels for advertisers to connect with potential customers.They launched stand alone, discreet campaigns where changes in the campaigns were mostly limitedto the copy or visual image of the product in use.Reaching potential customers in today’s business-to-business marketplace is much more complex.The range of channels for receiving information about products and services is enormous. People aretweeting, emailing, texting, surfing the net, checking in on Facebook, getting RSS feeds, updatingtheir Linked In status, Skyping, reading blogs and ratings of products by their peers – and they mightbe doing any of this while watching the nightly news or making dinner or attending a sporting eventor taking the train to work. Your lead generation effectiveness is determined by how well you plug intothis digital conversation on multiple channels.The speed of information about how products and services are used is lightening fast. When you posta status update that says “I’m headed to Singapore on business Thursday” it is instantly received byanyone in your network. When someone has an unpleasant experience at a restaurant and they post iton their Facebook page it is instant damage for the restaurant. Customers are exposed to a constantbarrage of multiple digital opinions that collectively form a fluid conversation in the customer’s headand that ultimately influences their purchasing behavior.To some extent marketers and sellers have less control over message and positioning than they did ina single channel, discreet campaign type of world. If someone wants to give your service a 3 star out of5 star rating you cannot stop them. Ironically, having more control today is about letting go and lettingyour community of users, customers and followers become your voice for positioning and messaging.Ways You Can Plug Into the you can use the customer by name and even referenceDigital Conversation an executive in the case study it adds to your credibility. A software company in Kansas City videotaped theirHaving a website might sound like old advice but it’s often customers using their product and used the footage as aa good place for small businesses to start because it’s promotional of the first places a potential customer will visit tolearn more about your offering. Using key words to make it Twitter is one example of how people digitallyeasier for potential customers to find your site is important. communicate. In the six years of Twitter’s existence itOnce you attract someone to the website you’ll want to has created an entirely new form of communicating forcontinue the digital conversation for as long as you can personal and business purposes. Today there are 350by engaging the visitor with offers like free white papers, million tweets per day. Even the US president Barackarticles of interest, links to other resources, and more. Obama has a Twitter account. He has the most followers of any person in the world.Using case studies to tell your story on the website letsyour prospects learn not only what you do but what Savvy marketers are using Twitter to do more than justresults you were able to deliver for your customers. When broadcast content to their target market. For example, 5© Hoover’s, Inc. 2012. All rights reserved.
  7. 7. according to “Smart Blog” on social media a graduatestudent and doctoral student at The University of Texas It’s tempting to jump rightuses a game format to engage Twitter users to predict boxoffice sales for movies. In her report, “137 Twitter Tips: into the digital world, butHow Small Businesses Get the Most from Twitter”, AnitaCampbell says that small business owners who take the it’s essential that you havetime to have a strategy for how they will use Twitter aremore likely to achieve their objectives. a strategic plan that’s rightFor many of Facebook’s 500 million users it is the central for your business. Leadpoint of activity for communicating and staying connected.The ease with which information about products and generation must become aservices is passed and commented on makes Facebook apowerhouse of influence. Getting the ‘Like’ endorsement core competency for youris today’s version of a seal of approval. Facebook’s Placesfeature lets users tell friends where they are. If you’re a organization.marketer think of how valuable that would be. You couldsend a coupon for a special drink at a café or recommend Strategy and Perspectivea point of interest in the area. Facebook has recently It is easy to be intimidated and overwhelmed by theexpanded its location service by letting users add where complexity of choices, speed of information, and multiplethey have been, where they are, and where they are going. channels that characterize reaching new customers inThe opportunities are limitless. today’s selling environment. While it is complex there are tools and resources available that can simplify the task.The Value of Blogging to Become a We’ll cover those later in the white paper.Thought Leader One thing is certain: lead generation must become a coreSimply plugging into the digital conversation doesn’t competency for any small and medium sized business. Youguarantee a successful result. One of the main themes for must have a strategic and long term perspective on it. Yougathering more influence in this multichannel, digital arena need a ‘trial and error’ perspective because of the manyis to be seen as a thought leader. Blogging is one way to channel and technology options available and options thatbuild thought leader status. are increasing in number all the time. You need to measure the impact of any campaign otherwise you risk makingAccording to Technorati, there are over a hundred million repeated investments in campaigns that aren’t paying off.blogs indexed since 2002. Blogging is largely aboutexpressing opinions and the online community still can’tget enough of that. You can invite people to subscribe toyour blog and they are notified every time you have a newpost. You can tweet a blog post. You can post it in yourLinked In account or Facebook page. However, if you tryto sell on your blog, or in any other digital medium wherethe reader is expecting to be educated, you’ll immediatelylose credibility. If you continue the practice you’ll lose yourcommunity of followers. 6© Hoover’s, Inc. 2012. All rights reserved.
  8. 8. III. CREATE AND MASTER THE LEAD CONVERSION FUNNELOnce you begin to engage the individual executives in your target market you’ll want to create asystem for converting the leads you generate. That system can be designed using one of the oldest,most valuable tools in sales – the sales funnel.The Sales Funnel The BuyCycle FunnelThe sales funnel is the ideal tool for lead conversion, The BuyCycle Funnel is effective by breaking up the buyingbut not because it’s a metaphor for the sale. Rather, it’s process into customer milestones that indicate significanta metaphor for how customers buy. Mark Sellers, sales commitments have been made toward the purchase of aconsultant and author of the thought leading book The product or service. Sales executives can be more efficientFunnel Principle, and creator of The BuyCycle Funnel™ in their selling efforts by carefully choosing the right sellinghas given a new perspective of the funnel by making it activities based on the commitments the customer hasa tool that is 100% about the customer buying process. made. For example, if a customer has not committed to“Every company should take the time and use the proper an entry level type of business analysis of their issuesresources to define its customer buying process”, says or problems or needs, it’s not likely that they wouldSellers. This model becomes the filter for measuring, be ready to act on a proposal. If the customer has notmoving, tracking, and recording all sales efforts from lead made the commitment to engage in meaningful dialoguegeneration to purchase.” with the supplier, then offering to do product or service demonstrations could be premature. Some companies have taken the concept of the BuyCycle Funnel further to have marketing play a more valuable role in lead generation. One company that specializes in this area is Marketo, a marketing automation company in California. Marketo Vice President of Sales Bill Binch says in the sales 1.0 world marketing generated leads and considered its job completed. Sales on the other hand complained about the lack of quality or segmentation of the leads. They followed up on some leads but others went into a dormant file. For years marketing and sales historically didn’t work efficiently as a unit. Marketo Marketo’s business model changes the marketing/ sales relationship with an underlying theme of focusing both groups on the customer’s buying process. They tie the marketing cycle with the sales cycle to create what Binch calls a ‘revenue cycle’. The revenue cycle mirrors the complete journey of a lead from discovery of their problems and needs to the purchase. 7© Hoover’s, Inc. 2012. All rights reserved.
  9. 9. In the revenue cycle marketing assumes responsibility formore than creating awareness and generating leads for Marketing and sales mustsales. It begins with marketing creating awareness, butcontinues through a steady, disciplined lead nurturing develop a strategy and thenrole. For example, when some contacts engage earlybut don’t advance quickly to another stage of the buying work in sync to reduce theprocess Marketo keeps them engaged with appropriatecontent and frequency. When these leads later become risk of using the wrongmore serious about buying they’re likely to buy from thecompany who maintained the relationship throughout the sales approach at theprocess. wrong part of the funnel.These sales ready leads now get passed to salespeoplewho understand much better the journey the prospect Binch says that using lists as a baseline to find newhas taken to get where they are today. Sales can be more customers is valuable. Marketo uses Hoovers because ofeffective working the lead through the rest of the buying their high quality data.process and eventually closing the sale. Another way to generate new leads is by offering webinars.Having a lead conversion funnel is of little value if you don’t Mark Sellers of The Funnel Principle conducts a monthlygenerate a steady stream of leads onto your sales funnel. webinar series that focuses on opportunity managementThere are several avenues to pursue to do this. and the sales funnel. “We give our audience multiple opportunities to engage during the webinars. They canIncrease Your Internet Presence answer poll questions at the beginning, and they can respond to direct promotional offers at the end. We alsoBinch of Marketo says that you must have a presence on repurpose the webinar in blogs and even white papers.”the internet so that people can find you. • A website is a must. The more your site can engage Measuring Lead Generation Efforts prospects the better. Finally, a conversion funnel is key to measuring the effectiveness of your lead generation efforts. You can • Publishing content is an effective way to engage your determine if the leads you’re putting into your funnel are sales propects. high quality. You can track the velocity and volume of • Offering white papers that can be downloaded gives those leads through the customer’s buying process. You prospects another opportunity to engage. can know which selling and marketing activities are having an impact on the customer which activities are not. And • Offering newsletters lets prospects subscribe and you can make adjustments to your efforts. receive a regular message from your company when a newsletter is published. 8© Hoover’s, Inc. 2012. All rights reserved.
  10. 10. IV. EFFECTIVE TOOLS AND TACTICS FOR LEAD GENERATIONThe emergence of new tools in sales 2.0 effectivelylets companies run their businesses as if they had The availability of solarger budgets and staffs to do the work. The toolshelp companies identify customers in their target many effective tools formarket faster and more cost effectively. They help lead generation is themeasure investment returns on lead generationcampaigns. They save time on processing and reason why strategy ishanding off leads from one point in the processto another. They help companies cost effectively so important.nurture cool or warm leads.The availability of so many effective tools for lead generation is the reason why strategy is soimportant. Without a well defined strategy the tools could be underutilized. That said, without toolscompanies would have a hard time executing on well defined strategies.In the sales 1.0 world the tools of lead generation were mainly around trade shows, snail mailingefforts, mass marketing campaigns, referrals, and relying on salespeople to find new leads. Some ofthese tools are still relevant today but should be carefully deployed as part of a larger strategy thatincludes new tools and approaches. What is a standard set of tools for lead generation today? • CRM. The cost of CRM systems has gone down have to do market research to know the most largely due to SaaS (software as a service) popular key words associated with your products options. CRM theoretically allows companies and services, link to your site, build the brand to protect their contact and relationship assets. through content and messaging, promote a viral If a salesperson leaves the company all of his marketing effort, and measure the effectiveness or her contact information should stay with the of your efforts. company. CRM also lets VPs of sales and their staffs have visibility to the sales funnel and run • Search engine marketing. SEM is a less technical reports on leading and lagging sales indicators. offshoot of SEO. It’s more about the strategies CRM is used to execute mailing campaigns and behind your marketing and selling efforts. other lead generating events. • Email campaigns and landing pages. These • Search engine optimization/Google ad words. are still effective as long as they are purposeful SEO can seem complicated to the average and well written. Using landing pages and person but its basics are easy to understand. You white papers helps prospects learn about your 9© Hoover’s, Inc. 2012. All rights reserved.
  11. 11. services. They can position you as a thought »» House lists appear to be most cost effective leader. It’s important to avoid selling in a white to obtain, but when you factor in the paper since it will be an unpleasant surprise to investments required to get those names the reader. White papers help prospects realize they can be quite expensive. If a trade show new perspectives on issues that they might have costs $40,000 to attend you’d better get a overlooked. significant number of high quality leads to make that investment worthwhile. • Using lists such as Lead Builder from Hoovers. One unique characteristic of Lead Builder is that »» Lists from partners can be valuable, but the you can customize the list to meet exactly the typical problem is that they don’t always requirements you identify. come from your target market. That’s less a problem of the leads and more a problem of • Linked In. Linked In offers many possibilities the lack of a focused target market. for lead generation. Your immediate community of 1st level contacts is obviously first. These »» With rented lists you must be careful to contacts have contacts and therefore open up buy from a source that is highly reputable. much greater possibilities for introductions to new Otherwise the integrity of the list data is people. Discussion groups are fundamentally a suspect. Marketo uses Hoovers because targeting tool because they identify people who it trusts the data integrity. Hoovers uses a share a common interest that you might want to thorough cleansing and verification process reach. to ensure high data integrity. With Lead Builder you only pay for the names that • Using rented lists, lists from partners, media match your target market. You do not pay lists (publication subscribers), house lists (site for names you won’t use. registrations) and ad web forms and newsletters. There are advantages and disadvantages to each of these sources.Regardless of the tools and tactics deployed, marketers should adopt a ‘test and learn’ mindset to their lead generationefforts. Marketers have to be willing to try new technologies and tools for the simple reason that the prospects theywanting to reach are also experimenting. 10© Hoover’s, Inc. 2012. All rights reserved.
  12. 12. V. GETTING THE MOST FROM YOUR LEAD GENERATION EFFORTSRegardless of the tools you use and the markets you pursue or the budget you set for lead generationyou will want to commit to the following structure and discipline to make sure you maximize the valueof your lead generation investments.Manage to the long term from one stage to the next stage and you can find gaps in how well you facilitate that movement. This model isA long term strategy is more likely to achieve short term necessary for making effective hand offs from marketing/results. Committing to an annual budget for your lead lead generation to sales.generation maximizes your success. It avoids treating leadgeneration as a ‘situational’ function – that is, seeing it asa priority when business is slow but not when business is Have the right infrastructure and toolsbooming. One way to change the perspective is to create Effective lead generation requires an infrastructure to makea separate lead generation budget within marketing. This the investments in resources and tools pay a ROI. Formakes it clear what the objective is and therefore you’re example, you need a CRM system for collecting contactmore likely to achieve your goal. information, uploading lists, launching campaigns, tracking history of activities, and working a sales funnel. There areHave clear objectives of what you want to many SaaS models on the market such as Sugar CRM,, and Microsoft. There are also software-achieve based products.If you’re unsure of where you’re going you are not likely toget there. Goals and objectives for lead generation help Implementing email campaigns is necessary to reachyou focus, measure outcomes, and decide if and howchanges must be made. With a lead generationAdopt trial and error and always measureThe range of channel and technology options available for model based on thelead generation requires a trial and error approach on anongoing basis. It also means that you need to measure the customer buying process,impact of your campaigns to make sure they make sensebefore you repeat. Measurement helps you make logical your sales and marketingdecisions more quickly on where and how to spend yourlead generation investments. Remember to measure real teams will always have theintent to purchase, not just clicks and opens. Measuring ‘true north’ alignment.clicks and opens helps you nurture leads that are moreslowly in developing. Click patterns can be revealing but new customers and build your relationship with currentassess them in the context of other data. customers. Companies like Manticore Technology, Exact Target and Constant Contact are well known services.Build a buying process based sales modelThe customer buying process determines what and how Lead nurturing, scoring and segmenting helps you carrythey buy. With a model designed entirely on the customer on the digital conversation with prospective customersbuying process you and your sales and marketing team in ways that are most relevant to them, without pushingwill always have the ‘true north’ alignment. You’ll be more them away (being too aggressive) or by not picking up onefficient with your selling resources. Having a BuyCycle stronger buying cues. Eloqua, Marketo, and MarketingFunnel for example lets you know how a customer moves Sherpa are leading companies in this area. 11© Hoover’s, Inc. 2012. All rights reserved.
  13. 13. VI. RESOURCESWe have mentioned several resources throughout this white paper. For your convenience we havelisted them here and added several more for your benefit.Eloqua www.hubspot.comMarketo Geoffrey www.geoffreyjames.comMeclabs www.freemium.orgThe Funnel Principle and Google AnalyticsBuyCycle Sales Funnel Hoover’sMarketing Sherpa www.hoovers.comwww.marketingsherpa.comSeth Godin Selling Power 12© Hoover’s, Inc. 2012. All rights reserved.
  14. 14. Hoover’s Inc., 5800 Airport Blvd., Austin, TX 78752© Hoover’s, Inc. 2012. All rights reserved.