Long ago when the cost of a pint was around a quid, acquisition consisted of ‘cold calling’ or unsolicited visits to the homes of prospective customers. Customer acquisition was the realm of field sales, who were mainly men (at the time!) dressed in smart suits and driving leased cars, trying their best to acquire new customers. That no longer works, unfortunately.
In this article, we explain why lead generation is important. And why that takes place almost exclusively online.
Lead generation is the process of identifying potential customers and sparking their interest in an organisation’s products or services. It is a process where interested people are filtered out from the masses.
1. Outdated forms of acquisition have fallen by the wayside
In the past, ‘cold calling’ was the go-to way of acquiring new customers. Most salespeople did not find that the most enjoyable part of their work. That makes sense:
- You don’t know the subject or prospect yet;
- Sometimes you don’t even know who you should be talking to;
- The person you need is often protected by assistants;
- You can’t see this person and are totally dependent on verbal communication;
- You can never call at the opportune moment;
- There is fear of rejection;
- Sometimes you get flat-out snubbed.
These kinds of calls only yield results in a handful of cases. And on top of that, those numbers are getting worse and worse: by 2020, the chances of success with cold calling had fallen so low that we recommend abandoning it altogether. Fortunately, most sales teams have already done so.
It is even worse to have to walk into a business unannounced as a salesperson. This has long been considered a costly and inefficient approach. In today’s times, you certainly can’t do that anymore. In fact, 40% of hospitality companies only want to meet sales representatives that are announced (HNK, 2020). Just strolling in doesn’t work at all in those cases.
The only traditional method of acquiring customers that still works well are the more reputable trade fairs. These are informative events where there is a lot to experience, see, taste, smell, hear and feel. Nearly everyone who participates ‘goes home’ with 200 leads. And large organisations take in a lot more.
2. Potential customers are looking online
The first step of the acquisition process – lead generation – has become the priority of marketing professionals. Virtually all lead generation now takes place online and marketers are at the controls. And that makes sense, because your prospective customers are looking to buy through digital channels. A substantial part of their research has already taken place before there is any contact with a salesperson. In fact, it is getting easier and easier to make purchases without any contact with the sales team at all.
Let’s take a hypothetical decision that involves a somewhat more important and complex purchase. This could be a coffee brand, for example, with all of the associated tableware as well as a leasing arrangement for the machine. That’s what most prospective customers want to talk to an actual salesperson about. But even in that situation, a lot of the exploration and research has already happened long before the salesperson comes to the table.
That’s why we want to generate interest and offer inspiration, information and advice through our online channels. After that, we also want to identify that interested person by asking for a name and an email address. And usually even a bit more. We have listed tactics for this in our article ‘10 ways to generate leads‘. These strategies can be used by the coffee vendor to contact customers, after first informing them online.
3. Lead development will be ‘automated’
Leads alone won’t get us very far. We need customers. Just how big that step is varies depending on the product and market. While some purchases are easy to just try out (a tub of single cream), others can be a bit trickier (a new wholesaler). Sometimes the practical aspects require extensive consideration, such as our example of the coffee machine with a leasing arrangement. In other cases, the step towards making a purchase is more socio-psychological, such as replacing a coffee brand after 10 years of partnership. Whatever the reason, in most cases a lead does not immediately proceed to a purchase. Not even after a follow-up by a salesperson.
Even if it doesn’t happen right away, it could happen a bit later. On average, 17% of all leads end up making a purchase, according to Hubspot calculations (2017). To achieve that, however, we first have to nurture those leads. Following up and curating leads with the ultimate aim of getting them to make a purchase – i.e. converting them from a lead to a customer – is what we call lead nurturing. That means developing these leads to the point where they decide to buy.
The most common way of developing leads is to offer relevant information, usually via email. A specific offer can always be added here, such as for a contact opportunity, a competitive deal or a sample package. This gives us a pretty decent chance of still being able to sell something.
Lead nurturing campaigns are typically sent from marketing automation platforms such as Hubspot or Salesforce Pardot. Online lead generation is becoming increasingly important. And that means the demand for marketing automation is also growing at an extraordinary rate. According to Salesforce, the market for marketing automation platforms is growing at 31% a year.
Traditional ways of acquiring customers, such as cold calling or unsolicited visits from representatives are not effective. As a result, they are becoming increasingly rare.
Online lead generation is a much better match for the behaviour of potential customers, who mainly use online resources to find information and inspiration.
Once we have collected a lead’s contact details, we can start nurturing that lead until they make a purchase. For that we use marketing automation.
Request our Guide to Lead Generation with the handy 7-step plan now. These practical steps will help you make lead generation easier, faster and more successful in your organisation