Marketing-based Lead Generation in the Biological Sciences (Part 1)
By David Chapin
SUMMARY
VOLUME 2
, NUMER 10
When people responsible for sales and marketing in the biological sciences hear the words “lead generation,” an outbound call center is often the first thing that springs to mind. But outbound calling is just one way to generate leads. This article categorizes a wide variety of lead generation activities and puts these activities into context using “the ladder of lead generation.” By examining the different rungs on the ladder, we’ll compare the resulting quality of leads and the time to result, two important attributes to consider as you build your own lead generation initiatives. In the next issue, we’ll discuss how to craft an effective lead generating strategy.
Part 1: Understanding the Ladder of Lead Generation
The need for leads in the biological sciences
We’ve all heard the phrase: “All I need are better leads.” Many of us have said it ourselves; lead generation is a recurring challenge. Many organizations in the life sciences will ignore lead generation during the good times, and be faced with a dearth of new prospects when times get tough. The natural response when the crisis hits is to ramp up the outbound phone calls.
But lead generation doesn’t start, or end, with outbound solicitation. There are many ways to generate leads. Rather than have you reach reflexively for the phone, a well-planned lead generation strategy will enable you to utilize a variety of methods to achieve results. To understand the strengths and weaknesses of these different methods, and how they work together, you must first understand the ladder of lead generation.
The ladder of lead generation is not the typical “sales funnel.”
The concept of a “ladder of leads” is not new, and it can be interpreted in several different ways. For some, the ladder is the equivalent of a sales funnel (Figure 1). Looked at in this way, your leads are spread out on a ladder, according to the stage of the buying process they occupy. Early stage leads (so-called “cold leads”) occupy the lowest rungs of the ladder and later stage leads (so-called “hot leads – that is, those who are ready to buy) occupy higher rungs of the ladder. This ladder is really just a typical sales funnel turned upside down.
Figure 1: Turning the typical sales funnel upside down to create a “Lead Ladder” provides no additional utility; there are better ways to categorize your prospects. The “Ladder of Lead Generation” I’d like you to focus on doesn’t list the different stages of buying behavior, but shows all the activities that can be used to generate leads; see figure 3.
This approach has only limited utility. If you want to characterize people’s readiness to buy, there are much more useful models than a sales funnel. I’m going to digress briefly and remind you of a useful tool that we covered in this newsletter more than a year ago. Prochaska’s Transtheoretical Model effectively categorizes a prospect’s readiness to change (that is, to buy) into one of six stages. An understanding of this model points out the specific needs that clients have at each stage of the buying cycle.
Figure 2: Unlike a Sales Funnel, the Transtheoretical Model points to the support that buyers need at each stage before the sale: Educate the Unaware in Stage 1, Inspire the Interested in Stage 2, Reassure those with Intent in Stages 3 and 4.
Buyers need to be Educated, Inspired and Reassured as they progress from the earliest stage (Pre-Contemplation) to later stages (Planning and Action). When you fill these needs (for Education, Inspiration and Reassurance), you increase the likelihood that buyers will progress to the next stage – all the way up to “purchasing.”
Building a better ladder
In contrast to a sales ladder (or funnel), I’m using the idea of a ladder of leads in a different way entirely. This ladder is a scaffold on which all lead-creating activities should be placed, including every activity that generates leads: outbound calling, your trade show presence, your web site, your ads, your social media activities, articles you publish, etc. All have a place on the ladder of lead generation. Figure 3 shows all these activities grouped together into different families, such as Outbound Solicitation, Paid Exposure, etc. Organizing your lead generating activities in this way provides useful insight into planning and implementing lead generating initiatives within your own organization.
Figure 3: The Ladder of Lead Generation categorizes the activities that will generate leads, though not all possible activities are listed in this figure. Segmenting all lead generating activities in this way is valuable for planning your lead generating initiatives.
The rungs on the Ladder of Lead Generation
At the bottom of the ladder of lead generation are activities traditionally considered to be Outbound Solicitation and Personal Interaction activities, including walking the floor at a trade show, making sales presentations, cold calling and other methods of soliciting interest. The primary goal of these activities is to qualify individual prospects; that is, to determine what stage of the buying cycle they currently occupy.
In the middle of the ladder of lead generation are those activities typically considered to be Outbound Marketing. These activities include methods of purchased exposure such as: web sites, brochures, print ads, banner ads, sponsorships, trade show booths, direct mail, email blasts, etc. The primary goals of these activities are to be noticed by reaching a wider audience than is possible with outbound sales activities and to establish your positioning.
Just below the very top rung is the newest rung on the ladder, consisting of Content Marketing activities. These activities start with the creation of unique, relevant, valuable content. This content can then take many forms, such as newsletters, podcasts and whitepapers. Social media activities can be included in this rung as well, provided the content being promoted is truly unique, relevant and valuable to the intended audiences. The primary goals of these activities are to build trust with your audiences and to solidify your positioning.
At the very top of the ladder of lead generation are those activities typically considered to be under the purview of Public Relations. These activities include authoring books, publishing articles, being interviewed, etc. The primary goals of these activities are to get very wide exposure and to cement your organization’s positioning.
Key points about the Ladder of Lead Generation
There are several points you should understand about the ladder of lead generation:
- All activities on the ladder can be used to create leads, but all leads will not have the same value to your organization.
- Activities on higher rungs on the ladder generate a larger percentage of high-quality leads; activities on lower rungs may generate more leads, but a smaller percentage of them will be high-quality leads.
- Activities on lower rungs generate leads more quickly; activities on higher rungs more slowly.
Activities on different rungs yield leads of varying quality
Let’s start with the most obvious point: different leads have different value to your firm. An inbound lead (when a prospect contacts you) has a very different value than an outbound lead (when you contact a prospect). There are two primary differences: inbound leads tend to be in later stages of the buying cycle, and the conversations with inbound leads have a markedly different tone.
When a prospect contacts you, the prospect is motivated to find out if their need can be addressed by your offering. When you contact a prospect, there is an additional step; you must determine first whether they recognize that they have a need, and only then can you address whether your offering can address their need. In this latter case, you are trying to determine what stage of the buying cycle the prospect occupies. Inbound leads already recognize that they have a need; they are much more likely to be in the later stages of the buying cycle, so inbound leads are more valuable.
Not only are inbound leads more likely to be in the later stages of the buying cycle, but the entire interaction with inbound prospects is different in terms of tone and respect than those with outbound leads. Inbound leads have already “lowered the drawbridge” and emerged to engage you. People you contact through outbound efforts, by contrast, are frequently “on guard” against unwanted sales efforts. Piercing their defenses can be difficult.
Activities on different rungs yield different results
Research shows that the vast majority of prospects are in the earliest stage of the buying cycle, known as Precontemplation. Prospects in this stage do not recognize that they have a need and can be downright hostile. Statistically, prospects contacted through outbound efforts are more likely to be less welcoming, less interested and less valuable than inbound leads. In short, leads from outbound activities tend to be lower quality leads.
So, if inbound leads are of higher quality and therefore more valuable, how do you maximize the number of inbound leads? That is where the ladder of lead creation is useful. Activities that are on higher rungs of the ladder are more likely to generate inbound leads than activities on the lower rung.
Activities on higher rungs of the ladder also have a broader visibility to the audience, just as someone standing on a higher rung of a physical ladder is easier to see than someone standing on the ground. These activities bring greater prestige as well as greater visibility. In addition, activities on the higher rungs – when pursued conscientiously – can enable greater vision and insight into the challenges faced by your customers.
With all these advantages, why would you not focus all your lead generation activities on the top rungs of the ladder? The answer is simple: the top rungs are the slowest to yield results.
Figure 4: Different rungs of the ladder have different attributes, such as the quality of leads generated, or the time it takes to yield results.
Activities on different rungs yield results at different rates
Activities on the top rungs take a long time to yield results. Writing a book or even an article is no overnight proposition. Getting it published and promoting it takes time. As does getting a speaking engagement at a conference.
In contrast, by walking a tradeshow floor, you have the chance to qualify dozens if not hundreds of people in a single afternoon. With the proper telephone technique a week’s worth of outbound calling can yield many qualified prospects.
Using the Ladder of Lead Generation to improve your lead generation strategies.
In next month’s newsletter, we’ll discuss the different attributes (such as prestige, reach, cost and effort) of the various rungs on the ladder. We’ll review the solid foundation that is necessary for effective lead generation and we’ll provide some specific techniques for improving your lead generation initiatives. In the meantime, ask yourself: “Where does my organization have the strongest presence on the ladder of lead generation?”
Summary
- Everyone needs leads, but outbound solicitation is not the only way to generate leads.
- Some people use the phrase “the ladder of leads” as a substitute for the “sales funnel,” but the Transtheoretical Model is a better way to categorize leads than the “hot/warm/cold” divisions of the traditional sales funnel.
- In our usage, the “ladder of lead generation” is a scaffold on which all lead generating activities can be placed.
- All activities on the ladder can be used to create leads, but all leads will not have the same value to your organization.
- Activities on higher rungs on the ladder generate a larger percentage of high quality leads; activities on lower rungs may generate more leads, but a smaller percentage of them will be high quality leads.
- Activities on lower rungs generate results more quickly; activities on higher rungs more slowly.
Please note that the concept of the ladder of lead generation was introduced to us – in preliminary form – by Blair Enns. We are grateful to Blair for his leadership. We have extended his thoughts as we have applied them to the life sciences.
The Marketing of Science is published by Forma Life Science Marketing approximately ten times per year. To subscribe to this free publication, email us at info@formalifesciencemarketing.com.
David Chapin is author of the book “The Marketing of Science: Making the Complex Compelling,” available now from Rockbench Press and on Amazon. He was named Best Consultant in the inaugural 2013 BDO Triangle Life Science Awards. David serves on the board of NCBio.
David has a Bachelor’s degree in Physics from Swarthmore College and a Master’s degree in Design from NC State University. He is the named inventor on more than forty patents in the US and abroad. His work has been recognized by AIGA, and featured in publications such as the Harvard Business Review, ID magazine, Print magazine, Design News magazine and Medical Marketing and Media. David has authored articles published by Life Science Leader, Impact, and PharmaExec magazines and MedAd News. He has taught at the Kenan-Flagler Business School at UNC-Chapel Hill and at the College of Design at NC State University. He has lectured and presented to numerous groups about various topics in marketing.
Forma Life Science Marketing is a leading marketing firm for life science, companies. Forma works with life science organizations to increase marketing effectiveness and drive revenue, differentiate organizations, focus their messages and align their employee teams. Forma distills and communicates complex messages into compelling communications; we make the complex compelling.
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