What is a lead? A lead is a potential customer in terms of digital marketing and sales. Sometimes referenced as a prospect, this term identifies those users who express an interest in a business or service.
Lead generation is one of the most complicated yet most vital parts of an effective digital marketing strategy. As many professionals who work in this industry will agree, the mantra “if you build it, they will come” is not always accurate, particularly in a crowded marketplace.
The more leads or prospects a business has, the more opportunity they have to convert these prospects into customers. Anyone who provides personal information, most likely in the form of an email address or a social media following, is considered a lead and will likely be sent promotional material in the future.
How are leads collected?
Leads are gathered in a variety of different ways through both organic and inorganic marketing efforts.
Organically, leads are produced through the following, and more:
- Social media campaigns
- Search engine optimization copy
- Blogs and linking
Inorganically, many businesses will reserve a budget for lead generation for the following, and more:
- Paid content advertisements
- Paid social posts
Why is a large lead database important?
Having a robust lead database gives businesses the chance to reach a large number of potential customers with sales, promotions and other tactical campaigns. When pitching to investors or describing their successes, having a vast subscriber list is also a positive selling point since it can illustrate interest and need within the market and/or industry.
Many companies will use their lead accumulation to make a case for securing a deal or bringing on a new employee and offering equity.
By and large, leads are a representation of audience size today and potential reach in the future. It’s not an end-all, be-all figure for businesses to focus on, but it does offer some insight into their unique market position.
When can a lead be misleading?
No pun intended here, but a lead can sometimes be a misleading figure. A way to think about this is to consider your own actions online: Do you sometimes give your email address just so you can see something, then instantly cancel? Or do you provide your email address to order a product you need once and yet, receive their promotional emails for months — or years! — to come?
A lead doesn’t mean a person is a proper fit for the product or service and doesn’t depict their likelihood to convert to a long-term customer. It, relatively simply, recognizes they were once willing to shell out some personal information. And while a newsletter subscriber list of millions is impressive, if only two percent of those have genuine curiosity, your promotions are going mostly unread.
Leads can also be misleading if a company doesn’t actively clean out its subscribers. This means testing bounce-backs, eliminating bots or scam emails, and/or those who have never opened an email.
The same goes with social media: Your Instagram may have thousands of followers but very few likes, which could point to low engagement and unqualified leads. The best-case scenario is to have a fanbase of current customers, a large group of those on the edge of converting and those you need to win back to your business. Leads are only one part of the digital marketing wheelhouse.
Common uses for a lead
- To illustrate market interest and need
- To provide data on potential audience size and reach
- To share promotions, sales and other company or corporate news
- To make a case for investors and funding
- To demonstrate popularity to potential new hires
- To calculate the number of email addresses submitted