Generating Qualified Leads on the Internet

= = Generating High Quality Leads on the Internet How Manufacturers Can Dramatically Increase Marketing ROI A GlobalSpec White Paper 350 Jordan Road Troy, NY 12180 Tel: 518-880-0200 www.globalspec.com © 2006 GlobalSpec, Inc. Generating Qualified Leads on the Internet Executive Summary Traditional lead generation programs such as print ads, direct mail, trade shows, and catalogs are losing effectiveness in the manufacturing sector. They don’t connect with a target audience of engineers and technical buyers who have turned to the Internet to source products. Too often they produce unqualified leads. The result is that sales people waste time, money, and business resources trying to close deals with weak prospects who will never buy. On the other hand, high quality leads are prospects who have “raised their hand” to express a specific need for a product. They have buying authority or purchasing influence, and have indicated their intention to buy in the near term. Where can manufacturers find these high quality leads? On the Internet. Statistics show that over 90 percent of a manufacturer’s target audience is using the Internet to find the products and services they need. In turn, leading manufacturers now use the Internet to proactively generate leads. Benefits include the ability to reach a larger audience, maintain an ongoing presence, and measure results. However, not all Internet marketing is equally effective. Manufacturers must carefully choose an Internet lead generation strategy that produces only high quality leads and a significant return on investment. Generating high quality leads is only half the story; managing them is the other. It’s not uncommon for leads to fall off the bridge between marketing and sales and be lost forever — causing even the best conceived and executed marketing programs to fail. No matter where a lead comes from, manufacturers must instill a disciplined approach to responding to, managing, and tracking a lead in order to produce sales and gain intelligence to improve lead generation efforts. = 2006 GlobalSpec, Inc. 1 Generating Qualified Leads on the Internet What Exactly is a Lead? For marketing programs to be effective, they must provide three things: lead generation, lead qualification and handling, and long-term brand building. Although on the surface these requirements may seem simple and obvious enough, many sales and marketing mistakes are made when it comes to understanding what exactly a lead is. There’s a classic story about the sales manager who has a foot-high stack of “leads” on his desk, but can’t seem to close a sale with any of them. That’s because all those hundreds or thousands of names have come from a purchased list containing just about anyone who might be remotely interested in the product or service he is trying to sell. Naturally, very few of them can actually be considered real prospects. Why not? For multiple reasons: they haven’t expressed a need for his product, indicated they are ready to buy, or proven to have budget or authority to buy — in short, they’ve done nothing to distinguish themselves as a potential customer from the broader market. The sales manager ends up wasting precious time and money chasing after utterly unqualified “leads.” The Usual Suspects Too many marketing dollars Marketing, almost as much as sales, faces tremendous pressure to produce numbers. and too much time and Marketing’s key role is to generate demand. Maybe that’s why some marketers will effort from sales people are consider any name they dig up to be a lead, no matter where it came from. But a wasted on unqualified “suspects” who will never long list containing names of people working in your target industry does not 1 buy. constitute a list of leads. Likewise, a visitor who happens to request information from your Web site is not necessarily a lead (they could be a competitor, for instance). A walk-in at your trade show booth who registers to win a motorcycle is hardly a lead. In each of these cases, at best you’ve gathered “suspects” — a term that means exactly what it says: someone to be viewed with suspicion. The sad reality is that too 1 many marketing dollars and time are spent on such suspects who will never buy. 2006 GlobalSpec, Inc. 2 Generating Qualified Leads on the Internet Leads are Qualified Prospects: Sales People Want Them There are several characteristics that help you know whether or not you have a serious, qualified prospect on your hands: A serious, qualified prospect A prospect, unlike a suspect, is someone with buying authority or significant is someone with buying involvement in the buying decision, who “raises their hand” to express authority or significant interest in what you have to sell.2 This figurative hand-raising is a buying involvement in the buying decision, who “raises their signal or statement of need for your product or service. hand” to express interest in 2 what you have to sell. Information on the prospect is captured and passed from marketing to sales via lead management processes or an automated system. When a sales person gets the contact, he or she sees a serious indication that there’s opportunity to make money. Most sales people are on commission. Naturally they pay attention to those leads that have the most potential to turn into a sale.3 The sales person finds they are talking to a decision maker who has authority to buy or recommend, who has expressed a clear need for the product or service, and is prepared to take action soon. Prospects fitting this profile are high quality leads. They not only make sales people happy about the idea of making money, they make sales people — and the entire organization — more efficient and effective, more of a revenue-generating machine. Closing the sale becomes easier, sales people do not waste their time or skills on unqualified suspects, and they have more time for selling to other qualified leads. Where Do Leads Come From? Traditional Lead Generation Most professional marketers of technical products are well seasoned in their traditional lead generation options: trade shows, print ads, direct mail, and print catalogs. Publicity and referrals are also a source of leads, but the marketer may not have direct control over these avenues. 2006 GlobalSpec, Inc. 3 Generating Qualified Leads on the Internet The upside of traditional lead generation is its familiarity to both the marketer and the organization. Often, in-house resources and expertise are available to generate leads using these techniques. And although there is room for creativity, there also are established and generally known guidelines on how to conduct a direct mail campaign or how to select and prepare for a trade show — a comfort zone that’s easy to stay within. However, there is a significant downside to traditional direct marketing methods for There is a significant downside to traditional direct manufacturers trying to reach a target audience of engineers and technical buyers. marketing methods for reaching a target audience of engineers and technical Not Aligned with Buyer Behavior buyers. The best time to reach prospects is when they’re looking to buy, when they have a sense of urgency. Design engineers in particular feel this sense of urgency: if they significantly reduce new product development cycle time they can get an innovative product to market first, fill a customer need, and dominate an entire category before their competitors even get in the game. But when engineers are ready to buy technical components to support their development efforts, they don’t look in trade magazines or their pile of direct mail first. In a recent survey, 35 percent of engineers and technical buyers indicated their use of printed trade magazines is decreasing and 30 percent reported they would attend fewer trade shows in 2002 compared to 2001.4 These media do not reach engineers at the moment they are trying to solve their product sourcing problem. For example, maybe the trade magazine with your advertisement hasn’t arrived yet or was never opened or already thrown away. Perhaps your trade show isn’t until next month, or your catalog is out-of-date and missing your newest product. In these cases, you completely miss an opportunity to connect with your target audience when they are looking to buy. What are engineers doing instead? When engineers and technical buyers are actively When engineers and technical buyers are actively looking for products, they go to the Internet first. One Internet marketing expert put sourcing products, they go this situation bluntly: “Traditional marketing methods are losing their grip on to the Internet first. customers at an alarming rate. Trade shows, trade publications and direct mail deliver a fraction of the ROI they did only two years ago. The reason is simple. The 5 Internet.” 2006 GlobalSpec, Inc. 4 Generating Qualified Leads on the Internet Internet Lead Generation It’s becoming common knowledge among manufacturers that engineers and technical Many manufacturers are actively changing their buyers are searching on the Internet for the products and services they need. A marketing mix to generate recent Gartner Dataquest survey found that over 90 percent of engineers use the high quality leads on the 6 Internet to research technical products. They are seeking out product manufacturers Internet. and detailed product specifications. In another survey, 74 percent stated that the Internet has shortened their design cycle.7 With evidence like this, it requires no leap of faith for manufacturers to realize they need to be on the Internet. In fact, many are actively changing their marketing mix to generate high quality leads on the Internet.

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