To keep your startup up and running and extend your cash runway, you need to constantly acquire new customers, every single month.
But customers don’t magically appear on their own. Before a complete stranger can become a customer, they usually need to go through a few phases in the buyer’s journey.
Potential customers in the first stage are called leads.
Read on to learn more about what leads are, what different types of leads exist for startups, and how you can improve your lead generation strategies.
Table of contents:
What Are Leads?
A lead is a person who has a potential interest in your product or service.
This person will have shown interest in your business in one way or another. Some examples of behavior that turns someone into a lead include:
- Providing their contact information in exchange for a resource (webinar, eBook, your newsletter, etc)
- Signing up for a free trial
- Spending time on your website
- Chatting with a live agent on your website
Once someone becomes a lead, they fall inside your sales funnel.
It’s now up to you and your team to funnel these leads from the top of the funnel to the bottom of the funnel.
Some businesses will sell you lists of ‘leads’, but keep in mind that these lists aren’t leads in the traditional sense. People in these lists usually haven’t shown interest towards your product or services. Instead, their information got collected by someone else.
So while they may have shown interest in another business, they’re not technically a qualified lead for your business.
Not all leads are created equal.
Some people will enter your sales funnel and already be highly qualified leads. A qualified lead exhibits specific behaviors and has the required knowledge and resources to be ready to become a customer for your startup.
On the other hand, many leads will not yet be qualified to become customers. Maybe they don’t have the financial resources to invest in your product or service. Maybe they don’t have the exact problem that you can help them solve. In some cases, leads may have a problem, but they may need support in other areas before they’re ready for your product or service.
This is why it’s important for all startups to have a process to qualify leads. If your sales reps were to get on the phone with every single lead that comes into your sales funnel, this would be a huge waste of resources.
Instead, they should focus their efforts on the leads who are most likely to convert into customers. You find those leads by qualifying them.
In order to qualify each lead, you should take the time to:
- Fill out a complete customer profile, including size of their company if you offer B2B services
- Analyze the lead’s current wants and needs, and how it’s affecting them
- Find out how they make decisions – who else is potentially involved in the process?
When you know how to properly qualify your leads, you can not only save on your sales resources, but also become more accurate with your forecasting. That’s because you’ll have a clearer picture of how many leads have a high chance of becoming customers.
SQL vs. MQLs vs. Prospects
To keep track of which leads are at what stage of the funnel, it’s important to know how your startup qualifies its leads.
You can use different terms to define leads at several stages of your funnel, including Marketing Qualified Leads (MQL), Sales Qualified Leads (SQL), and Prospects.
Not all companies define each of these terms the same way. That’s because your process for qualifying leads will be different from other businesses’ methods. It depends on what methods you use to generate leads, what you consider a qualified lead, and what your sales process looks like.
But in general, MQLs are less qualified than SQLs, and SQLs are less qualified than prospects.
It’s not super important to define types of leads the same way as another company does, but you should at least know how your own startup defines them.
For example, a lead could become an MQL when they download an eBook, sign up for a free trial, or join your email list.
On the other hand, people who request a demo or fill out your contact form could be SQLs.
Some sales teams will consider SQLs to be prospects, whereas others will consider a lead a prospect only once they have had a conversation with someone from the sales team. Once again, the specifics don’t really matter, but your startup should define the differences and make it clear to both your marketing and sales teams.
How to Generate Leads For Your Business
You can generate leads using several methods, including:
- Paid advertising
- Inbound marketing
- Social media marketing
- Outbound sales
But here are some tips to make the most of your lead generation.
1. Test Several Opt-In Methods
When a stranger lands on your website, they become a visitor.
To turn them into a lead, you need a way to let them opt in and provide their contact information.
At first, you can have one way for visitors to opt in. This could be a free course, a PDF resource, a free trial, a demo request, or even a free consultation.
But don’t stick to a single opt-in method. You should add more ways to opt into your email list so that you can test what works best with your audience.
Remember that ‘what works best’ doesn’t necessarily mean that you’re generating more leads. For example, let’s say you have an eBook that’s converting 10% of your visitors into leads, while your free demo is only converting 0.5%.
At first glance, the eBook seems like it’s performing better, but you also need to look at the lead conversion rate. Your lead conversion rate is the percentage of leads that convert into customers. So what if your eBook has a lead conversion rate of only 0.1%, compared to 20% for the demo?
This means that your demo is generating ten times more customers than your eBook, even though the eBook generates more leads.
If this is the case, maybe the topic of your eBook doesn’t attract qualified leads. You can test out other topics to see what attracts higher quality leads, or retire the eBook entirely if your tests don’t work out.
2. Use Retargeting In Your Ad Campaigns
If you’re using paid advertising, such as Google ads or Facebook ads, it’s important to include retargeting campaigns.
Retargeting campaigns will show specific ads to people who have already performed certain actions. For example, you can retarget leads who are already on your email list. You can also retarget people who visited your website, but didn’t convert into a lead.
Retargeting allows you not only to expose someone to your brand several times, but also to show them specific content that can take them down further the sales funnel. Instead of seeing the same ads as before, they’ll see your retargeting ad.
3. Optimize With A/B Testing
Why is your website not converting visitors into leads?
The only way to know is to test it out.
That’s where A/B testing comes in. With an A/B test, you test out your original collateral with a variation and see which one performs better. After testing one element, you can test another and see if that improves your conversion rate. You can do this constantly to keep improving your conversion rate.
For example, let’s say you want to test a landing page. You could start by writing a new variation of your main headline and redirect 50% of your traffic to the new variation. If the new variation fails, you can try another one instead.
After testing headlines, you can see if using a different image would help.
You can run A/B tests on countless elements, including:
- Headlines and caption copy
- Different page designs
- Call to action buttons
- Ad copy
- Ad creatives
- Color variations
- Short vs long page variations
By running A/B tests, you can start generating more leads for the same investment over time.
4. Use Segmentation In Your Email Marketing
When a new lead joins your email list, what happens?
One method would be to put all leads in the same bucket. When you send emails, you send them to all your leads.
But a better way to manage your leads is to use segmentation in your email marketing software.
When you segment your leads, you can use different messaging and promotions based on their behaviors. You can also keep track of who purchased what, who opted in through what methods, and anything else that can help you keep track of your leads.
This will allow you to send much more targeted email campaigns to each segment. For example, you can send relevant information that adds value to an eBook, but only to those who downloaded it.
5. Establish A Solid Process For Your Sales Team
Once you have a qualified lead, it’s important not to let them fall through the cracks.
But it can get difficult to track every lead and remember what step of the sales process you’re at with everyone.
That’s why it’s important to establish a clear sales process that your sales reps can follow. You should use a CRM to keep track of every lead and keep your notes all in one place.
For example, how long should you wait before contacting a lead who has shown up to a demo? What type of language should you use in your email? Should you call them instead?
If you have a clearly established process, your sales team won’t have to wonder.
6. Add A Live Chat To Your Website
Some website visitors will have urgent questions that require a real person. You can immediately start a conversation with them by adding a live chat feature to your website.
Live chats make it easier to interact with visitors while they’re still interested in your offers. You can point them in the right direction or provide the support they need instead of leaving them alone to click away when they get frustrated.
Keep Track Of Your Leads For Your Startup
Leads are a vital part of your business. Without them, you don’t have anyone to sell your product or service to. Create and optimize your process for identifying, qualifying, and converting leads, and you’ll benefit from higher conversions, more revenue, and faster growth.
This content is presented “as is,” and is not intended to provide tax, legal or financial advice. Please consult your advisor with any questions.