B2B Lead Generation Best Practices Guide 2023
In B2B lead generation, not all strategies are created equal. We’ve spent 12 years studying the most effective tactics for bringing in new sales leads, which we share in this article.
In sum, the ideal steps to take are as follows:
- Determine your marketing spend by comparing your customer lifetime value (LTV) to the average cost of acquiring a customer (CAC) on various marketing channels
- Invest strategically in one-time campaigns to set up your long term lead generation channels for success
- Fill your marketing funnel using proven inbound channels
- Iterate, test, and adjust
Below, we elaborate on these steps to help you see what works best for B2B businesses in 2023.
B2B Lead Generation Best Practice #1: Determine your marketing spend by comparing CAC to LTV
The two most powerful tools you have in B2B lead generation are your LTV and CAC. If you don’t know them precisely yet, that’s ok; you should estimate them carefully, running your math by other team members until you have a number you feel comfortable with. For companies with recurring revenue, LTV is calculated as follows:
- Divide your annual gross profit by your number of customers
- Then, multiply that number by the average number of years customers stay with your company
NOTE: The unit of time doesn’t matter to the calculation, so you could do this calculation on a monthly basis as well.
For companies that sell products, LTV is calculated by multiplying average order value by average number of purchases made over a customer’s lifetime.
Knowing your LTV allows you to back into your ideal Customer Acquisition Cost: how much (on average) you should spend to acquire a single new customer. A great LTV to CAC ratio is 4:1, meaning if you know you’ll earn $40,000 in gross profit from a new customer, you would spend at most $10,000 to acquire them.
When you have your marketing budget for the year, you can use published CAC benchmarks of various B2B lead generation channels to strategically select channels that will allow you to acquire customers at or below your target CAC. Doing so will also allow you to estimate how many new customers you’ll acquire that year.
But before you commit your marketing budget, you’ll want to use a piece of it to lay the foundation of success for your marketing through a few well-curated one-time spends.
B2B Lead Generation Best Practice #2: Invest strategically in one-time campaigns
Certain one-time marketing investments can pay off disproportionately for B2B firms. You will need to determine if that’s the case, but to help you do so, here are three scenarios where a strategic one-time investment paves the way for long term success.
- You know that your customers are searching for your product or service on Google; thus, you plan to invest in SEO. Before doing so, you spend 60 days running a pricey Google Adwords PPC campaign to help build a list of the highest-converting keywords in your industry.
- Your firm hasn’t traditionally generated leads from its website, and when customers come to the site, they don’t convert at a high rate. You decide to invest in an expensive website redesign that gives you a web presence that is well-branded, conversion optimized, fast, and secure.
- You’re testing a new product, or an existing product in a new market that has little overlap with your current customers. Exhibiting this product at trade shows and running a 90-day ad campaign will help you gauge interest
The danger is that when these one-time campaigns become a business’s default way to generate leads, it results in steadily increasing CACs over time, as businesses will always need to pay for each lead but PPC price inflation drives prices up. Instead, invest in inbound channels for the majority of your lead generation.
B2B Lead Generation Best Practice #3: Fill your marketing funnel using proven inbound channels
Inbound lead generation refers to any method that “pulls” interested visitors in. The biggest advantage of inbound lead generation is that the potential customers you attract think it’s their idea to contact you, which results in shorter sales cycles (thus lowering your CAC). This results above average ROI for inbound strategies when compared to B2B lead generation strategies as a whole.
Below are the following 3 strategies we’ve found to be the most effective in the post-pandemic market of 2023. In addition to ROI we’ve also considered each strategy’s learning curve, overall cost, time commitment, and time until you’ll begin to see results:
- Public speaking. Public speaking is incredibly effective at generating leads, as nothing else can compete with both the prestige that comes with speaking opportunities, and the value of presenting directly to your potential customers in a trust-building context. It does come with caveats, however, which are that you need to have an experienced and confident speaker on your team, allocate time to travel to events, and already have enough industry name recognition to be asked to speak at those events.
- SEO and Thought Leadership. This is the next best inbound lead generation method. By publishing content on your website that leads your industry’s conversations, you can attract a steady stream of visitors. When you combine this with SEO that understands search intent, those visitors will be potential customers who are interested in buying your product or service. This is also the most scalable lead generation method, but requires a long-term commitment to see results.
- Informal Networking. Informal networking refers to any networking with potential customers where selling isn’t the primary focus of the event or group. This is effective because it’s relatively inexpensive, so you can always be doing it in the background, but slower than the other methods.
Once you’ve decided on the best channels to invest in, you’ll then want to keep updating your techniques to ensure that your funnel remains full.
B2B Lead Generation Best Practice #4: Iterate, Test, and Adjust
No matter what your lead generation methods are, you should be constantly looking for ways to improve upon them. When you begin any campaign, establish the KPIs that you will use to measure success. Take into account the timeframe of the campaign when doing so — if you’re using a strategy that won’t see results until 6 months in, your overall ROI isn’t going to be useful for making short term corrections. Through regular iteration, testing, and adjustments, you’ll be able to build a lead generation pipeline that is sustainable long-term.