For almost every product and almost every service, there is a market – that is, customers willing to spend money on an offer. Finding and convincing exactly these customers is one of the most important and most challenging tasks for any company. The famous Henry Ford is often quoted as saying that half of his advertising spend was wasted money; he just didn't know which half.
To turn prospects into customers, what you need above all is a competitive offer. At least as important is the data generated when a potential buyer makes initial contact. In marketing jargon, this data is also called leads. If they are of good quality, acquiring new customers becomes child's play and you address exactly the right customers.
Leads are people too
Markets consist of a large, usually unmanageable number of participants. Especially products and services aimed at end customers could be of interest to millions of people. But by no means is every consumer a potential prospect, let alone a customer, for your offer. To avoid fishing in murky waters, you need intelligent sales processes.
Sales ties up many resources, such as time, manpower, and money. Using these as efficiently as possible is the whole point of sales processes. Shedding light on the matter and identifying potential prospects is the job of lead management, and it always stands at the beginning of a sales process.
Lead management – or, more broadly, marketing – has various tools at its disposal, all of which pursue the goal of winning prospects for your offer through qualified data. If contact with the interested consumer exists, or such contact is possible and the consumer has already signaled interest, then we speak of a lead. Leads are therefore prospects who can be qualified through data – in other words, real people in the flesh with the intention of spending money. They are the object of every salesperson's desire.
When is a lead a lead?
Leads can first be roughly divided into two areas that pursue similar intentions but operate with somewhat different data. Quality data in B2B marketing means something different than high-quality data in the B2C space. A lead therefore always means more than a mere collection of data.
In general, a lead describes a state in which a prospect provides their data and thereby, at least indirectly, signals a willingness to buy. A lead therefore differs from other consumers through their behavior. In marketing jargon, this is referred to as the depth of information.
For B2B leads, this depth should be significantly greater – that is, more qualified. The email address of a company used, for example, to subscribe to a newsletter is not yet a qualified lead, but it can become one. The assessment would be quite different for an end consumer. If they subscribe to a newsletter, the likelihood that they are considering a purchase is very high, and they are therefore regarded as a lead. Leads must therefore always be viewed in context. For lead management, this means correctly interpreting incoming signals. With the right measures, the first signal then turns into a qualified lead. But getting there can be a long road.
The quality of leads makes the difference
One of the most popular methods for generating customer data is prize competitions. There's hardly any difference between the online and offline worlds here. The idea is obvious: to win, participants have to reveal data – name, address, and email are the basics. Regardless of the outcome of the competition, the provider now has customer data that, by definition, constitutes a lead. But has the participant actually signaled an interest in a service or product? The answer is probably no. Nevertheless, the data is suitable for further contact.
In lead management, this is therefore called a cold lead, which – unlike a warm lead – has no customer-specific depth of information. Put differently, the cold lead initially holds only limited commercial value for the company. The question now is: how can this value be increased and a warm lead be generated from a cold one? Rule of thumb: the higher the probability of a sale, the higher the value of the lead.
Reaching a warm lead in 4 steps
For this transformation to succeed, sales and marketing should actively practice lead management.
Classification
A first step toward enriching leads with depth of information is classification. Try to expand your data collection by one central aspect right from the start – for example, company size in B2B or household income in B2C. With this information, you can then make an initial classification. If, for example, you have developed a product for smaller craft businesses, contact data from larger retail chains is of little use to you.
Qualification
Based on the classification, the relevant groups should now be qualified further. To do this, define a few aspects that your target group should or must have. If, for example, you have classified the craft businesses, a possible qualification would be the number of employees or the trade – say, only joineries. Ideally, this data can already be captured during the initial data collection. If this isn't the case, further measures must follow to determine more specific data.
Prioritization
You now have a somewhat clearer view of your target group. With further measures, the goal is to identify the prospects within this group with the highest possible purchase intent. To do this, you should record prospects' reactions, both offline and online. If, for example, there is a joinery that repeatedly responds to your information offers, this would argue for high prioritization. If, on the other hand, you receive hardly any responses or your further outreach falls flat, this argues for lower priority. The better this step can be implemented, the better the data basis for the next step.
Scoring
Scoring is the supreme discipline of lead generation and can determine the success or failure of your sales activities. From all the information of the first three stages, plus any existing history of a prospect or customer, you now derive a numerical value. Decisive for the quality of the scoring is the underlying evaluation system. The more intelligently and flexibly data can be evaluated, the more accurate the score value becomes. Prospects with the highest values are then the top candidates for your sales team.
A lead score should not, however, be set in stone. Rather, scoring is an ongoing process that, when carried out conscientiously, can become a treasure chest for a sales team. Careful lead scoring is, on the one hand, the result of a lead generation process and, on the other, the starting point for further in-depth measures. Above all, lead scoring can make the actual goal easier to reach: the sale.
Buying and qualifying leads
For most companies, acquiring new customers is vital for survival. But by no means do all companies have professional sales processes and results-oriented lead management. Especially in industries where a high number of prospects is required for sales success, commercial lead providers play to their strengths. Among the most important buyers is likely the finance industry, with its classic war of attrition.
But what seems tempting at first glance is not always sensible on closer inspection. The question before buying leads must therefore always be: how did the provider qualify the leads? Often, simple address lists are sold that are neither classified nor qualified. You can't build any kind of sales process with such collections of data. In this case, the minimum requirement must be that the data is up to date. If that is ensured, you can use the data as the basis for your own lead qualification process.