What Is Lead Nurturing, and How Could It Affect My Sales?
Lead generation is an important marketing task for most small service businesses. A lead can be defined as a potential buyer that is actively seeking a product or service that you provide. Unfortunately, small businesses often find that they can’t convert enough leads into sales to make them profitable. Many businesses implement a lead nurturing policy to extract additional value from leads that they have purchased, but which they have not immediately converted into a sale.
What is Lead Generation?
Lead generation is the name given to a set of strategies used to acquire the contact information (and permission to use that contact information) of potential buyers. Companies use dozens of different lead gen strategies that range from the simple (ex: posting a form on your website to encourage customers to contact you when they want service), to the complex (ex: participating in a real-time auction to buy leads that other companies have generated).
What these strategies have in common is that they put you in touch with potential buyers that are actively seeking the products and services that you offer.
While lead generation is great in theory, it is often complicated in practice. One study found that only 27 percent of leads are “sales-ready”. (Sales-readiness is a fuzzy concept, but it essentially means that the lead is far enough into their purchase process to take part in a meaningful dialogue with your sales team).
What should you do with the remaining 3/4 of your leads that have expressed interest, but aren’t ready to buy? Nurture them.
What Is Lead Nurturing?
Lead nurturing is a marketing strategy that encourages leads to:
- Purchase from you rather than your competitors
- Purchase sooner rather than later
Companies engaged in lead nurturing use a marketing automation tool, such as an email autoresponder to communicate with leads at pre-defined points in time. Those emails promote the company and keep it top-of-mind until the lead is ready to buy.
Lead nurturing tools also make it possible to present your leads with offers that nudge them towards making a purchase sooner than they otherwise might. Those offers could be based on:
- Discounts (“Get 20% off if you buy in the next 24 hours”)
- Events (“April is a great month to get your air conditioner checked”)
- Information that you know about your leads (“I see that you read our white paper on automated backup systems. Would you like to try our system for free for 30 days?”)
Email is not the only platform that companies use to nurture their leads. Some companies use social media or retargeted advertisements as part of their lead nurturing processes.
Why is Lead Nurturing Important?
Without a lead nurturing strategy, you are leaving money on the table. Industry research suggests that more of 80 percent of new leads never convert into sales.
Other research suggests that companies that implement effective lead nurturing strategies generate more value from their leads. According to Aberdeen, nurtured leads make 47 percent larger purchases than their non-nurtured counterparts. Furthermore, Forrester found there is a 20 percent increase in sales opportunities from nurtured sales leads as compared to leads that are not submitted to a structured lead nurturing process.
If you are like the 74 percent of companies that feel converting leads into sales is their top priority, then the time has come for you to explore lead nurturing. Data from Ascend2 shows that 48 percent of a company’s leads require more time and additional contact from your company’s marketing personnel to explain the value of making a purchase.
A Few Bonus Tips on Lead Nurturing
Consider the following suggestions as you build your lead nurturing process:
- Use Data To Generate Better Content: Your marketing automation tools can provide you with a large amount of information to improve your lead nurturing process. These reports show you which links were clicked, how many people opened your email, and other valuable data. Use these reports to get a sense of how your leads are interacting with your emails. For instance, if a certain email had an extremely high open rate, you’ll want to look at that message to determine what caught their eye, such as the subject line or a special offer.
- Engage Users With Personalized Content: Consumers are four times more likely to respond to an offer if it’s personalized. Email marketing platforms make it easy to include a person’s name and other pertinent details to engage users. For example, inserting a lead’s name into the subject line of an email will grab their attention because the message will seem personalized for them.
- Vary Your Methods for Nurturing Leads. According to Smart Insights, email has an average open rate of about 21 percent and a click-through rate of nearly 4 percent. Additionally, educated buyers use search engines to look for the information they need. Effective lead nurturing strategy doesn’t just focus on a single channel. Any marketer worth their salary will implement multi-channel lead nurturing tactics to generate business for your company. Social media platforms like Twitter, Facebook, Instagram, and LinkedIn are imperative to your success as well. Using social media management software such as Sprout Social makes it easier than ever to target and engage potential leads and nurture them through the sales funnel. Also, on platforms such as Facebook or Google+, retarget leads using their email addresses so your ads surface in their feeds.