Customer acquisition is an essential part of business. However, as concerns over data privacy intensify – it was a major talking point at Mobile World Congress in February for instance – and reports that the EU is working on the biggest overhaul in data privacy laws since 1995, the way organisations and individuals interact on a day-to-day basis is without question, as Chris Combemale, Executive Director at the DMA points out, being redefined.
Email plays a vital part in that process. In fact, according to the DMA’s Customer Acquisition Barometer unveiled at the end of last month, it is not only the most preferred channel by marketers, but also the most trusted by consumers, aside from a company’s website. In contrast social media is the least trusted.
I’ve previously discussed the importance of focusing on quality over quantity and that a successful lead generation program is a long-term investment, but there is a tendency for marketers to view it as a direct response channel and compare it in the same light as display, PPC and affiliate marketing. The trouble is those that try and value lead generation in terms of immediate sales performance are really undermining its true value.
A successful campaign is built around segmentation, personalisation, mining of customer data profiles and a sound understanding of people’s buying behaviour. You have to respond quickly and be relevant. If you don’t address people in a targeted and personalised manner which best serves their needs, you’ll fail to achieve the best level of return available to you.
So in light of this, and mounting concern about how customer data is being acquired and used by marketers, combined with the increasing challenge of establishing one-to-one communications with consumers, here are 10 pitfalls to avoid when developing a lead generation campaign:
1. Attempting to buy leads at the lowest rate possible:
This is a complete misnomer. Possibly the most frequently committed error is the expectation that by seeking out the cheapest leads, you are seeking out the cheapest cost per acquisition. I’ve lost count of the number of times that advertisers have been burnt in this way. Many assume that negotiating a cheap cost per lead will generate a better return – however the cost per lead can often have no bearing on how much return you get.
By driving down the price of a lead, advertisers inadvertently restrict the availability and breadth of your most likely source of active leads, which are often restricted to incentivised and untargeted traffic sources. Ultimately these do not generate the most engaged customers and can produce a far more damaging effect to your business by destroying your deliverability.
2. Quantity over quality:
By attempting to buy leads at the lowest possible rate, many advertisers are seduced by high numbers, even though the chances of conversion are almost non-existent. Some advertisers accept this, seeing it as a numbers game without understanding the likely ROI, but playing the numbers game can seriously damage deliverability.
3. The quick win lead gen:
Driving the quick win leads to the commoditisation of the cost of data (see point 1) – where the value of building relationships with your customers is missed entirely and where targeted marketing is discarded in favour of a scattergun approach.
By going for the quick win, you might risk alienating your relationship with the customer altogether. Every time you alienate one of your prospects, your available audience decreases by one and there is a risk that this person tells their friend (often on social media), which will decrease your prospect pool even more.
4. No understanding of your lead:
Very often, leads are collected with minimal understanding about what these prospects want and why they showed an interest in the first place. This lack of understanding of future intent vastly restricts your ability to target them with far more relevant content that will convince them to buy. Having a properly thought through content strategy and nurture program is fundamental to this, and completely at odds to the quick win lead gen approach.
5. One size fits all approach to new leads:
Marketers understand the need for accurate message targeting and personalisation when it comes to CRM and benefit from the sales uplift when it’s done correctly. However for some reason, new leads collected through lead generation often just receive the same generic newsletter. Often this is done as a result of not knowing anything about them, but in doing so it clearly starts the relationship off on the wrong foot.
6. Judging the success of your lead gen on the basis of sales from one email click:
To view lead generation as a quick win channel is to ignore the customer journey entirely, and overlook the value of your data in driving sales across all other channels. We know from testing that email acquisition drives 96% of its sales across other digital channels. That means the vast majority of sales generated by email occur as a result of a subsequent interaction on another channel. It’s important to understand this in valuing the contribution email makes to new customer sales.
7. Cherry picking the same prospect pool:
In an effort to closely manage targeting, advertisers will often focus their lead generation efforts in a particular area which is their ‘sweetspot’. Whilst this should absolutely be your first priority when embarking on a lead generation campaign, there is a danger that you might end up fishing too many times from the same pond. As a result you may miss other opportunities within your target audience base where the cost of acquisition may be lower, where your messaging is more effective or where conversion is higher.
Through Teradata’s lead analysis platform we identify those user profile and behavioural attributes that are creating the most long-term customer value. This helps us to identify hidden pockets of customers where there is an opportunity for us to realise future sales growth, which wouldn’t have been identified otherwise.
8. Lead Generation driven by sales growth targets:
Very often, lead generation is used to plug a gap in sales figures – usually a last minute effort. This is a short-term approach that doesn’t produce the best value from the leads. In some instances, especially in large ticket items such as financial products, automotive or travel, the buying decision begins and takes place over a series of touch points long before the actual booking date. Marketers therefore need to plan in their lead generation efforts to begin at the start of their customer’s typical purchase decision cycle.
9. Focus on organic registrations only:
It is true that the reason email has been so successful is a result of the strong engagement from organic website registrations. However, these represent your existing brand advocates and therefore do not over time generate incremental sales or sources of new customers. This requires brands to reach out to other third party media sources to generate new pools of prospects who may have had little or no exposure to your brand. Only by embarking on this route, will you be able to generate growth.
10. Lead generation platforms don’t guarantee success:
Lead generation platforms provide a great way of managing the collection and reporting of your lead generation efforts, but a data framework only goes so far and will not guarantee that you communicate with those leads in the most effective way possible.
This can only be achieved with the support of creative and analytical expertise which can help you to build a content strategy which maximises the relationship with your leads from the word go. Teradata’s lead nurture program, as an example, is a fully managed service that enables our clients to achieve just that.
