If you’re reading this, chances are you’re missing out on a lot of potential income and opportunity for your business. Why? Let me tell you. You might not be using Lead Generation strategies to their fullest potential, or you might have the wrong type.
Luckily for you, we’ve got you covered. In this article, we’re going to explain, in-depth, what Lead Generation is, and the two types of lead generation that you should utilize. We will then weigh up their pros and cons so you can make an informed decision about your next strategic steps.
What is Lead Generation?
You can define lead generation as the process of stimulating and cultivating interest in a product or service to generate potential revenue. Often this is done by a specific conversion (action), such as signing-up, subscribing, purchasing something, etc. As soon as someone becomes interested in what you’re selling, the first step in your sales cycle should be taken by your visitor, turning them into a lead. A lead is a potential customer that is interested in your goods or services. And to get these potential customers, marketing techniques are utilized.
Why is Lead Generation important?
If your business is not actively trying to cultivate and stimulate interest in your goods and services, then you are missing out. Having an “if you build it, they will come” mentality will stifle your business’s ability to grow and adapt. Especially in eras such as mass-advertising, where you’re trying to be ‘heard’ through the noise, this is essential. Every business needs customers to grow and needs to engage in marketing to get customers; this is where lead generation comes in.
How is Lead Generation done?
There are many ways to conduct lead generation – cold calling, email marketing campaigns, SEO, blogging, advertising, the use of lead magnets, social media marketing, and more. These tactics generally fall into two categories, Inbound and Outbound Lead Generation. Each of these categories has its pros and cons, which we will discuss below. Keep reading.
Inbound Lead Generation
Inbound Lead Generation is a relatively new way of generating leads, which overtime is taking over some severe ground from outbound generation. You can define ‘Inbound Lead Generation’ as the use of customer-centric marketing tactics to draw potential leads to your website and convert them into leads. What do we mean by “customer-centric”? Customer-centric can be two things:
- A type of lead generation that ensures value in the form of content and knowledge given to the potential customer to gain trust and build relationships.
- The second explanation is that this type of lead generation allows potential customers to choose the time and platform for engagement. If they wish to engage at all.
Pros of Inbound Campaigns
Builds trust and establishes long term relationships
Arguably, inbound lead generation’s greatest strength is the ability to build trust and long-term relationships. Given the focus on being customer-centric, inbound campaigns dispel potential distrust and notions ‘greedy ulterior motives’ that they may think advertisers harbor. It is a non-invasive way of generating leads. Therefore, it establishes a fertile ground on which you can build trust and grow fruitful relationships.
The resulting boons are loyal repeat-customers who are more likely to engage in pseudo-referral marketing by sharing the ‘good word’ about your business and a strong reputation to present to new prospective leads.
It is more cost-effective
Most of the expenses involved in inbound marketing campaigns are time-related and go towards producing informative and valuable content. While some inbound tactics may cost a small amount of money, e.g., some SEO techniques like guest posting or paying someone to create content, these costs can be mitigated or wiped entirely. Furthermore, the content you create is permanent and can be reused over and over again, and on several different platforms at once. Given the permanence of your content, inbound campaigns can last indefinitely; it is a long term investment.
Cons of Inbound Campaigns
Reactive and passive
With inbound campaigns, instead of actively engaging and seeking prospective leads, you take a passive and responsive approach. If customers are interested in what you have to offer, they will come. Otherwise, they will move on. With this strategy, the number and kind of perspectives you obtain is out of your hands; this might cause leads that aren’t very effective for your business, which can lead to a lower conversion rate in the long term.
Slower way to build revenue and customer base
The rate at which you grow your customer base and leads will also be significantly slower than in outbound marketing. By sitting and waiting for your leads to come to you, you are relying heavily on the effectiveness of your lead magnets. If your lead magnets are not attractive enough or valuable enough to prospective leads, then your customer base may not grow at all! The slower your customer base grows, the slower and thinner the stream of potential revenue you obtain will be.
Outbound Lead Generation
Outbound Lead Generation, otherwise known as “interruption marketing” or “interruption lead generation,” consists of directly and deliberately targeting individuals with a message or call, whereby the marketer determines the type and timing of the interaction as opposed to the prospect. Compared to inbound marketing, outbound marketing is more traditional, utilizing direct channels such as email, calling, radio/TV advertisements, and billboards. Outbound marketing requires a strong knowledge of your target demographic, including their responses and incentives to be successful, and to avoid potential pitfalls.
Pros of Outbound Campaigns
Proactive, direct, and deliberate
Outbound marketing campaigns take an active, direct, and intentional approach, as opposed to the passive ‘sit and wait’ approach that inbound marketing uses. When it comes to this type of marketing, marketers will comprehensively research their target demographic and find prospective leads that align perfectly with the profile. The result of this direct and deliberate targeting is a list of ideal leads who’s needs and interests align with what goods and services you offer. This alignment, in turn, drastically increases the rate of potential conversions.
Quickly build revenue and customer base
With this approach, you won’t be sitting behind your computer, waiting for a prospect to take action. Instead, you will start getting leads as soon as you start reaching out. It is especially beneficial for new businesses that have not yet established a customer base, or companies that are looking to expand their customer base rapidly. You’ll be able to offset initial business costs and give your business a good head-start for the road ahead with a solid customer base to back it.
Furthermore, after having established a customer base, you’ll be able to safely and more reliably transition to Inbound marketing to take a more long term and cost-efficient approach to generating new leads.
Cons of Outbound Campaigns
When it comes to Outbound Marketing Campaigns, you must spend money to make money. Whether you’re paying for direct advertising, influencer marketing, physical advertisements such as pamphlets or billboards, or paying people to engage in cold calling, the costs of such will quickly begin to ramp up. You must conduct careful calculations, take into account the costs of marketing, and the expected return on investment. Next, you should research the demographics thoroughly, and your marketers must also be well versed in what they’re doing. If you neglect these factors, the costs may quickly burn through the roof of your business.
Can be intrusive and annoying for customers
One of Outbound Lead Generation’s most significant strengths also happens to be one of its most significant weaknesses. While active, direct, and deliberate targeting of prospective customers is an excellent way to quickly pull in leads (and the right type of leads), it’s also an effective way to be annoying and intrusive. Especially for those who are unreceptive to this style of marketing. If not done correctly, outbound lead generation runs the risk of alienating potential leads, sowing seeds of distrust, and harming the reputation of the business.
Conclusion – Which one is best
Now that you’re aware of the benefits and drawbacks of both Inbound and Outbound marketing, it’s time to think about which marketing strategy best suits your business. As you may have guessed, there’s no magic formula – the marketing type that you pick will depend entirely upon your budget, your business goals and objectives, the level of maturity of your business, and the pros and cons of each marketing type.
If you don’t have a lot of money to spend, you may want to consider inbound marketing. If you’re looking to expand your customer base rapidly, you may want to consider outbound marketing. If you have great content and an existing customer base, you can develop over time cost-effectively with Inbound marketing. Don’t forget that you are not limited to one marketing type, and you may combine approaches or switch from one to the other when it suits your business.