What is Lead Generation
There are questions out there that sound like they should be simple to answer, but in actuality create quite the conundrum, proving not easy and the answer not concise. That’s how we feel when talking about lead generation. On the one hand, it is as simple as, “someone who is interested in, could be interested in, or matches the profile of those typically interested in your product or service.” With the performance marketing space relying more and more on lead gen campaigns, along with the pressure that some of the more mature markets face, it’s a question that we think about with ever increasing frequency. The answer to the question doesn’t just help explain a type of offer, it should hold the key to figuring out the next new set of offers that will keep the performance marketing community humming.
First, let’s take a look at some of the features that have defined the world of business to consumer lead generation to date. We’ll use the prototypical examples of mortgage and education.
Online to Offline – People are doing research for a service that while in some cases they could purchase online, the typical and/or preferred method is offline. This is exactly the case with mortgage and education. You can’t refinance a mortgage online, and while you might investigate different programs and locations, you can’t enroll online.
Online didn’t invent lead generation, it just increased the scalability and efficacy. Mortgage brokers and for profit education institutions needed new customers prior the internet, but they didn’t have search, email, or real-time aggregators. They had direct mail, cold call, benches, billboards, etc. They also didn’t have a lot of information. That was one advancement that online enabled – not just closer to real-time – but filters that help companies determine fit and how best to serve the individuals. That’s where the form came from.
People to People – As for what lead gen is, we can also say what it is not. It’s not ecommerce. It’s not amazon.com or walmart.com. It’s not about things. It’s about people where the fulfillment relies heavily on another person.
Different Types of Leads – Some companies have tried to promote a distinction between marketing and sales leads. In this vocabulary, a marketing lead is a newsletter sign-up. It’s a request for more information but does not involve interacting with a person. Mortgage, education, insurance, home services, etc. are sales leads because people are trying to sell something. We’ve never really liked this distinction for two reasons. The first is that everyone is trying to sell something. The user may not interact with a person after expressing intent, but the company who purchased that lead is selling something. Second, it muddies the water of existing vocabulary. Sales leads is a term historically used by businesses selling to other businesses. That is the term they use to refer to data – mined or real-time.
What’s Taking So Long – The rise of insurance has been one of the big success stories within lead generation. Online lead generation for auto insurance has been around since the late 1990’s, but it didn’t really take off until 2010. Part of that was economic. The financial crisis made every cent count so the message of “15 minutes could save you $500,” resonated. That primed the consumer pump. It was the buyer side of the pump that really took so long. It took incredible sales efforts, consolidation, and competition to help insure that if a user filled out a form, there was a likelihood of monetizing it. Without the nationwide coverage, those trying to buy media could never buy enough or monetize what they did buy strong enough to be competitive.
Technology is also a factor. If you are a website and you want to serve ads, you use an adserver. You won’t build it. You will either use a basic, free one, or you will license a more enterprise version. The same applies if you want to buy ads on sites. You don’t have to worry about the technology. That’s not so in lead gen. People haven’t given up on trying to build their own technology. And, with so many different fields, rules, and potential combinations, finding a one-size fits all platform is very challenging.
All told, the relative cost and time to scale for lead gen is much greater than in other types of segments.
An Expression of Intent – When you talk to someone that has worked at companies like Orbitz or Travelocity, they will talk about buying leads, but they are really talking about clicks. An email address can be a lead. A call can be a lead. A free trial could also be a lead. It’s really about an expression of intent. In our biased view, all of the buying around Facebook and on Twitter for likes, follows, etc., that’s lead gen. A form doesn’t make something a lead. And if something is not a form that doesn’t mean it can’t be a lead. It’s customers interacting with and being connected to companies, and doing so in an accountable manner.
Where Might It Go – In many regards, we are at a crossroads. Lead generation is not going anywhere, but we know that it needs to evolve. For the past decade, it has remained relatively static, but as the world is changing so too is the world of lead gen. From Uber to companies like SpareFoot, new technologies are creating new companies. What does it all mean for you? Come find out at LeadsCon East – July 23 – 25 in NYC. Even better, you can attend for 25% less – Click here to save more than $150.
