How to Optimize Lead Generation

© Hoover’s, Inc. 2012. All rights reserved.

Optimize Lead Generation with Effective Business Tools and Processes

Lead volume and quality is down for many SMBs due to our slow global economy and an uncertain near 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.

1© Hoover’s, Inc. 2012. All rights reserved.

TABLE OF CONTENTS

Introduction

Lead Generation Begins by Defining Your Target Market

Lead Generation Requires a Comprehensive Commitment to Enter the 24/7, Multi-Channel, Multiplex Digital World

Create and Master the Lead Conversion Funnel

Effective Tools and Tactics for Lead Generation

Getting the Most from Your Lead Generation Efforts

Resources

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III.

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IV.

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VI.

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Lead Generation - The New Normal Another reason for lower lead volume is within your control. It has to do with SBM trying to generate leads in ways that no longer work, ways that are no longer credible. Single and discreet email campaigns are stand alone and have limited impact. Also, relying on salespeople to generate most leads is not a good use of your sales asset. Marketing cannot be satisfied that its job is done once leads are found and handed off to sales. Sales must follow through efficiently on qualified leads. A key to generating and selling to leads more effectively is a new commitment to your lead generation strategy and to mastering new technologies and tools.

This change in strategy is not as easy as it seems. Lead generation can be a big challenge for many businesses. The new normal of lead generation can seem like a maze with unclear directions for getting the lead and the sale or an obstacle course with new technologies, tools and concepts that you need to master. The process is dynamic so just when you get it figured out it changes again.

To effectively take control of your lead generation efforts requires changing your perspective and strategy. This starts by taking an honest assessment of the investments you make in lead generation, understanding how leads are generated and knowing the effectiveness of those strategies and tactics. With this new perspective, the role of technologies and tools becomes clearer. Even more fundamental is the need for the right perspective on the strategic importance of generating leads.

Now is the time to rethink your lead generation perspective and discover a new vocabulary of lead generation - lead scoring, lead nurturing, email marketing campaigns, landing pages, white papers, the buying process of customers, social media strategies, the sales funnel, and more. Even slight changes in tools and processes can result in dramatic benefits to your business.

Step by Step Guide to Lead GenerationIn this white paper you will learn the following about lead generation:

• Why defining your market as a first step increases the payoff of any lead generation effort

• Why having a conversion sales funnel that matches the buying process is a key part of creating an effective demand generation system

• Why your lead generation strategy needs to adapt to new best practices

• The most effective tools available for lead generation

• How to maximize the return on your lead generation efforts

If you’re a SMB owner you have to congratulate yourself – you’re still in business after the worst financial crisis in a generation. The crisis taught you many things, including the value of key customers, 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 uncertain near 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.

INTRODUCTION


Defining and Grouping Key Stakeholders by Understanding the Buying ProcessDefining the executives that are key stakeholders in the buying process for your products or services starts by first identifying the buying process itself. For example, the sales team for a manufacturer of an infusion pump system learned in selling to one hospital that the stakeholders in the buying process were divided into two groups. One group of stakeholders was comprised of administrators who were more interested in lowering costs. The other group was comprised of clinicians such as nurses and doctors who were more interested in getting key features and benefits that would improve usability or patient outcome, even if the solution was more expensive. For a company that considers the purchase of a CRM solution (customer relationship management) the vice president of sales could be a key stakeholder if their sales team will be the primary users of the product. The CEO might get involved in purchases where the dollar value of the investment is large. He or she might even need to get the approval for the purchase from the board of directors. Knowing these buying process dynamics helps you target the right stakeholders.

One thought leader who puts a high value on knowing your target market is Brian Carroll, Executive Director of Research at MECLABS and author of the gold standard book “Lead Generation for the Complex Sale”. The cost of deploying a sales team to work on low potential leads is too high. Marketing has to continuously improve the quality of the leads it hands off to sales and sales must continually improve the conversion of those leads. Carroll says that this step is critical to getting a higher return on your lead generation investment. He says, “It’s better to spend $25 on a verified name than to have your salesperson call the wrong people.”

Tailor Your Message to Each Call PointFinally, your message and approach needs to be tailored to each call point. The CEO has a longer term perspective and wants to know the financial impact of any investment. He also needs to know how an investment fits with the strategy he has set forth with the team. On the other hand, selling to the CEO’s directors might mean your message should address concerns and issues at the department level or virtual team. They want to know how your solution will make the team more effective, sell more,

The more things change the more they stay the same. Getting the most from any lead generation investment 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 target market is a combination of identifying the companies you want to sell to and the people in those companies 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 device companies? Healthcare networks? Pharmaceutical companies? Biotech? Research facilities? If your market is medical devices can you narrow it further? Some companies specialize in products such as infusion pumps and drug delivery. Others specialize in devices used in an oncology setting like the safe transfer of toxic chemotherapy drugs. Others specialize in devices used in the operating room arena like 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 – which is identifying the stakeholders who participate in the buying process.

I. LEAD GENERATION BEGINS BY DEFINING YOUR TARGET MARKET


or help reduce cost. A CFO might be focused on return on investment or getting favorable terms and conditions. A CIO is concerned about integration of processes and capacity of his team. A nurse on the floor wants the product to work reliably and accurately every time.

If you don’t tailor your message to the individual audience you run the risk of coming across as lacking credibility and not understanding their needs.

Know the Problems You Can Solve with Your Products and ServicesThe volume and quantity of leads you generate is determined by how well you communicate your understanding of customer needs and your capabilities in solving them. When your messaging connects, the audience believes you and finds you credible. That credibility is always earned and continually tested each time a customer connects with you.

You might understand a market’s needs because you already service and sell to customers in that market. As you try to expand to other companies the stakeholders will be looking for signs that you understand their business. Some companies have used case studies to demonstrate their understanding and capabilities. One common approach is to have a ‘Customers’ tab on the home page. This lets prospective customers immediately see how their peers and other companies have used your services and how they might similarly benefit. A company in the consulting services business has organized its website by the problems it solves. This makes it very easy for prospective customers to begin to engage in a digital conversation.

Understand Needs for each Stakeholder GroupYou might have to learn about needs by doing research on the industry. You might not need to know intimately about each executive’s situation – that’s what questions and sales calls are for – but you have to demonstrate quickly that you know enough about the market they sell to, and grasp the problems and obstacles that challenge their success.

Since a complex sale has multiple stakeholders participating in the buying process, and they each have a unique perspective on the situation you might think it’s impossible to create a customized message for each person. Organizing the stakeholders into groups with similar interests and perspectives simplifies this task.

For example, many C-level executives invested in CRM solutions to improve productivity in their sales organizations. However, the return on these investments is sometimes missing. Regarding his six-figure investment in a CRM system the CEO of one company in the credit industry impatiently asked his executive staff “where’s my return?” If you go back to the point where he participated in the purchase of this system you’ll find that he approved the purchase because he believed it would deliver return.

The CEO’s staff with lower titles might have a different perspective on the situation. For example, someone in IT might be more interested in security of the CRM and the support they get from the software vendor. They might want to know how they can generate reports faster or with less effort, or both. A salesperson using the CRM is interested in how easy it is to get into the system to enter data and run reports. A sales manager wants a system 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.

Stakeholders today are looking for signs that you know and understand their business.


For 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 limited to 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 are tweeting, emailing, texting, surfing the net, checking in on Facebook, getting RSS feeds, updating their Linked In status, Skyping, reading blogs and ratings of products by their peers – and they might be doing any of this while watching the nightly news or making dinner or attending a sporting event or taking the train to work. Your lead generation effectiveness is determined by how well you plug into this digital conversation on multiple channels.

The speed of information about how products and services are used is lightening fast. When you post a status update that says “I’m headed to Singapore on business Thursday” it is instantly received by anyone in your network. When someone has an unpleasant experience at a restaurant and they post it on their Facebook page it is instant damage for the restaurant. Customers are exposed to a constant barrage of multiple digital opinions that collectively form a fluid conversation in the customer’s head and that ultimately influences their purchasing behavior.

To some extent marketers and sellers have less control over message and positioning than they did in a single channel, discreet campaign type of world. If someone wants to give your service a 3 star out of 5 star rating you cannot stop them. Ironically, having more control today is about letting go and letting your community of users, customers and followers become your voice for positioning and messaging.

Ways You Can Plug Into the Digital ConversationHaving a website might sound like old advice but it’s often a good place for small businesses to start because it’s one of the first places a potential customer will visit to learn more about your offering. Using key words to make it easier for potential customers to find your site is important. Once you attract someone to the website you’ll want to continue the digital conversation for as long as you can by engaging the visitor with offers like free white papers, articles of interest, links to other resources, and more.

Using case studies to tell your story on the website lets your prospects learn not only what you do but what results you were able to deliver for your customers. When

you can use the customer by name and even reference an executive in the case study it adds to your credibility. A software company in Kansas City videotaped their customers using their product and used the footage as a promotional piece.

Twitter is one example of how people digitally communicate. In the six years of Twitter’s existence it has created an entirely new form of communicating for personal and business purposes. Today there are 350 million tweets per day. Even the US president Barack Obama has a Twitter account. He has the most followers of any person in the world.

Savvy marketers are using Twitter to do more than just broadcast content to their target market. For example,

II. LEAD GENERATION REQUIRES A COMPREHENSIVE COMMITMENT TO ENTER THE 24/7, MULTI-CHANNEL, MULTIPLEXED DIGITAL WORLD


according to “Smart Blog” on social media a graduate student and doctoral student at The University of Texas uses a game format to engage Twitter users to predict box office sales for movies. In her report, “137 Twitter Tips: How Small Businesses Get the Most from Twitter”, Anita Campbell says that small business owners who take the time to have a strategy for how they will use Twitter are more likely to achieve their objectives.

For many of Facebook’s 500 million users it is the central point of activity for communicating and staying connected. The ease with which information about products and services is passed and commented on makes Facebook a powerhouse of influence. Getting the ‘Like’ endorsement is today’s version of a seal of approval. Facebook’s Places feature lets users tell friends where they are. If you’re a marketer think of how valuable that would be. You could send a coupon for a special drink at a café or recommend a point of interest in the area. Facebook has recently expanded its location service by letting users add where they have been, where they are, and where they are going. The opportunities are limitless.

The Value of Blogging to Become a Thought LeaderSimply plugging into the digital conversation doesn’t guarantee a successful result. One of the main themes for gathering more influence in this multichannel, digital arena is to be seen as a thought leader. Blogging is one way to build thought leader status.

According to Technorati, there are over a hundred million blogs indexed since 2002. Blogging is largely about expressing opinions and the online community still can’t get enough of that. You can invite people to subscribe to your blog and they are notified every time you have a new post. You can tweet a blog post. You can post it in your Linked In account or Facebook page. However, if you try to sell on your blog, or in any other digital medium where the reader is expecting to be educated, you’ll immediately lose credibility. If you continue the practice you’ll lose your community of followers.

Strategy and PerspectiveIt is easy to be intimidated and overwhelmed by the complexity of choices, speed of information, and multiple channels that characterize reaching new customers in today’s selling environment. While it is complex there are tools and resources available that can simplify the task. We’ll cover those later in the white paper.

One thing is certain: lead generation must become a core competency for any small and medium sized business. You must have a strategic and long term perspective on it. You need a ‘trial and error’ perspective because of the many channel and technology options available and options that are increasing in number all the time. You need to measure the impact of any campaign otherwise you risk making repeated investments in campaigns that aren’t paying off.

It’s tempting to jump right into the digital world, but it’s essential that you have a strategic plan that’s right for your business. Lead generation must become a core competency for your organization.


Once you begin to engage the individual executives in your target market you’ll want to create a system 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 FunnelThe sales funnel is the ideal tool for lead conversion, but not because it’s a metaphor for the sale. Rather, it’s a metaphor for how customers buy. Mark Sellers, sales consultant and author of the thought leading book The Funnel Principle, and creator of The BuyCycle Funnel™ has given a new perspective of the funnel by making it a tool that is 100% about the customer buying process. “Every company should take the time and use the proper resources to define its customer buying process”, says Sellers. This model becomes the filter for measuring, moving, tracking, and recording all sales efforts from lead generation to purchase.”

The BuyCycle FunnelThe BuyCycle Funnel is effective by breaking up the buying process into customer milestones that indicate significant commitments have been made toward the purchase of a product or service. Sales executives can be more efficient in their selling efforts by carefully choosing the right selling activities based on the commitments the customer has made. For example, if a customer has not committed to an entry level type of business analysis of their issues or problems or needs, it’s not likely that they would be ready to act on a proposal. If the customer has not made the commitment to engage in meaningful dialogue 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.

MarketoMarketo’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.

III. CREATE AND MASTER THE LEAD CONVERSION FUNNEL


In the revenue cycle marketing assumes responsibility for more than creating awareness and generating leads for sales. It begins with marketing creating awareness, but continues through a steady, disciplined lead nurturing role. For example, when some contacts engage early but don’t advance quickly to another stage of the buying process Marketo keeps them engaged with appropriate content and frequency. When these leads later become more serious about buying they’re likely to buy from the company who maintained the relationship throughout the process.

These sales ready leads now get passed to salespeople who understand much better the journey the prospect has taken to get where they are today. Sales can be more effective working the lead through the rest of the buying process and eventually closing the sale.

Having a lead conversion funnel is of little value if you don’t generate a steady stream of leads onto your sales funnel. There are several avenues to pursue to do this.

Increase Your Internet PresenceBinch of Marketo says that you must have a presence on the internet so that people can find you.

• A website is a must. The more your site can engage prospects the better.

• Publishing content is an effective way to engage your sales propects.

• Offering white papers that can be downloaded gives prospects another opportunity to engage.

• Offering newsletters lets prospects subscribe and receive a regular message from your company when a newsletter is published.

Binch says that using lists as a baseline to find new customers is valuable. Marketo uses Hoovers because of their high quality data.

Another way to generate new leads is by offering webinars. Mark Sellers of The Funnel Principle conducts a monthly webinar series that focuses on opportunity management and the sales funnel. “We give our audience multiple opportunities to engage during the webinars. They can answer poll questions at the beginning, and they can respond to direct promotional offers at the end. We also repurpose the webinar in blogs and even white papers.”

Measuring Lead Generation EffortsFinally, a conversion funnel is key to measuring the effectiveness of your lead generation efforts. You can determine if the leads you’re putting into your funnel are high quality. You can track the velocity and volume of those leads through the customer’s buying process. You can know which selling and marketing activities are having an impact on the customer which activities are not. And you can make adjustments to your efforts.

Marketing and sales must develop a strategy and then work in sync to reduce the risk of using the wrong sales approach at the wrong part of the funnel.


• CRM. The cost of CRM systems has gone down largely due to SaaS (software as a service) options. CRM theoretically allows companies to protect their contact and relationship assets. If a salesperson leaves the company all of his or her contact information should stay with the company. CRM also lets VPs of sales and their staffs have visibility to the sales funnel and run reports on leading and lagging sales indicators. CRM is used to execute mailing campaigns and other lead generating events.

• Search engine optimization/Google ad words. SEO can seem complicated to the average person but its basics are easy to understand. You

have to do market research to know the most popular key words associated with your products and services, link to your site, build the brand through content and messaging, promote a viral marketing effort, and measure the effectiveness of your efforts.

• Search engine marketing. SEM is a less technical offshoot of SEO. It’s more about the strategies behind your marketing and selling efforts.

• Email campaigns and landing pages. These are still effective as long as they are purposeful and well written. Using landing pages and white papers helps prospects learn about your

What is a standard set of tools for lead generation today?

IV. EFFECTIVE TOOLS AND TACTICS FOR LEAD GENERATION

The emergence of new tools in sales 2.0 effectively lets companies run their businesses as if they had larger budgets and staffs to do the work. The tools help companies identify customers in their target market faster and more cost effectively. They help measure investment returns on lead generation campaigns. They save time on processing and handing off leads from one point in the process to another. They help companies cost effectively nurture cool or warm leads.

The availability of so many effective tools for lead generation is the reason why strategy is so important. Without a well defined strategy the tools could be underutilized. That said, without tools companies 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 mailing efforts, mass marketing campaigns, referrals, and relying on salespeople to find new leads. Some of these tools are still relevant today but should be carefully deployed as part of a larger strategy that includes new tools and approaches.

The availability of so many effective tools for lead generation is the reason why strategy is so important.


services. They can position you as a thought leader. It’s important to avoid selling in a white paper since it will be an unpleasant surprise to the reader. White papers help prospects realize new perspectives on issues that they might have overlooked.

• Using lists such as Lead Builder from Hoovers. One unique characteristic of Lead Builder is that you can customize the list to meet exactly the requirements you identify.

• Linked In. Linked In offers many possibilities for lead generation. Your immediate community of 1st level contacts is obviously first. These contacts have contacts and therefore open up much greater possibilities for introductions to new people. Discussion groups are fundamentally a targeting tool because they identify people who share a common interest that you might want to reach.

• Using rented lists, lists from partners, media lists (publication subscribers), house lists (site registrations) and ad web forms and newsletters. There are advantages and disadvantages to each of these sources.

» House lists appear to be most cost effective to obtain, but when you factor in the investments required to get those names they can be quite expensive. If a trade show costs $40,000 to attend you’d better get a significant number of high quality leads to make that investment worthwhile.

» Lists from partners can be valuable, but the typical problem is that they don’t always come from your target market. That’s less a problem of the leads and more a problem of the lack of a focused target market.

» With rented lists you must be careful to buy from a source that is highly reputable. Otherwise the integrity of the list data is suspect. Marketo uses Hoovers because it trusts the data integrity. Hoovers uses a thorough cleansing and verification process to ensure high data integrity. With Lead Builder you only pay for the names that match your target market. You do not pay for names you won’t use.

Regardless of the tools and tactics deployed, marketers should adopt a ‘test and learn’ mindset to their lead generation efforts. Marketers have to be willing to try new technologies and tools for the simple reason that the prospects they wanting to reach are also experimenting.


Regardless of the tools you use and the markets you pursue or the budget you set for lead generation you will want to commit to the following structure and discipline to make sure you maximize the value of your lead generation investments.

Manage to the long termA long term strategy is more likely to achieve short term results. Committing to an annual budget for your lead generation maximizes your success. It avoids treating lead generation as a ‘situational’ function – that is, seeing it as a priority when business is slow but not when business is booming. One way to change the perspective is to create a separate lead generation budget within marketing. This makes it clear what the objective is and therefore you’re more likely to achieve your goal.

Have clear objectives of what you want to achieve If you’re unsure of where you’re going you are not likely to get there. Goals and objectives for lead generation help you focus, measure outcomes, and decide if and how changes must be made.

Adopt trial and error and always measure The range of channel and technology options available for lead generation requires a trial and error approach on an ongoing basis. It also means that you need to measure the impact of your campaigns to make sure they make sense before you repeat. Measurement helps you make logical decisions more quickly on where and how to spend your lead generation investments. Remember to measure real intent to purchase, not just clicks and opens. Measuring clicks and opens helps you nurture leads that are more slowly in developing. Click patterns can be revealing but assess them in the context of other data.

Build a buying process based sales modelThe customer buying process determines what and how they buy. With a model designed entirely on the customer buying process you and your sales and marketing team will always have the ‘true north’ alignment. You’ll be more efficient with your selling resources. Having a BuyCycle Funnel for example lets you know how a customer moves

from one stage to the next stage and you can find gaps in how well you facilitate that movement. This model is necessary for making effective hand offs from marketing/lead generation to sales.

Have the right infrastructure and tools Effective lead generation requires an infrastructure to make the investments in resources and tools pay a ROI. For example, you need a CRM system for collecting contact information, uploading lists, launching campaigns, tracking history of activities, and working a sales funnel. There are many SaaS models on the market such as Sugar CRM, salesforce.com, and Microsoft. There are also software-based products.

Implementing email campaigns is necessary to reach

new customers and build your relationship with current customers. Companies like Manticore Technology, Exact Target and Constant Contact are well known services.

Lead nurturing, scoring and segmenting helps you carry on the digital conversation with prospective customers in ways that are most relevant to them, without pushing them away (being too aggressive) or by not picking up on stronger buying cues. Eloqua, Marketo, and Marketing Sherpa are leading companies in this area.

V. GETTING THE MOST FROM YOUR LEAD GENERATION EFFORTS

With a lead generation model based on the customer buying process, your sales and marketing teams will always have the ‘true north’ alignment.


We have mentioned several resources throughout this white paper. For your convenience we have listed them here and added several more for your benefit.

Eloquawww.eloqua.com

Marketo www.marketo.com

Meclabs www.meclabs.com

The Funnel Principle and BuyCycle Sales Funnelwww.funnelprinciple.com

Marketing Sherpawww.marketingsherpa.com

Seth Godinwww.sethgodin.com

Hubspotwww.hubspot.com

Geoffrey Jameswww.geoffreyjames.com

Freemiumwww.freemium.org

Google Analyticswww.google.com/analytics

Hoover’swww.hoovers.com

Selling Powerwww.sellingpower.com

VI. RESOURCES

© Hoover’s, Inc. 2012. All rights reserved.

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