Lead generation

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Lead generation is a marketing term that refers to the manufacture of connections between well-matched consumers and target corporate vendors. Lead Generation is frequently seen in the financial world. This would manifest itself as companies calling up on behalf of banks and loan institutions, gaining a commission on the leads they generate (pay-per-lead) or the sales made (pay-per sale) or a combination thereof.

Lead generation is largely a rendezvous problem where there is a set of well-matched candidates for product purchase within a larger set of poorly matched candidates. Various methods are used to try to identify the well-matched candidates which are also called sales leads.

There are several methods used in marketing lead generation:

Each of these involves two primary rendezvous strategies: broadcast and concentration.

"Broadcast" involves communicating to a broad set of candidates with the expectation of a statistical response back to the marketer. Advertising is a classic example of broadcast marketing rendezvous.

"Concentration" involves identifying and creating situations that concentrate well-matched candidates into a broadcast-effective set. Market segmentation and trade shows are classic examples of concentration-marketing rendezvous strategies.

Lead Generation is especially important in the real estate and mortgage industries where each lead could generate thousands of dollars in income.

Lead Generation has been particularly effective in the automotive industry. In the US, companies such as Cars.com and Edmunds are taking a significant market share of the new car, contract hire and car leasing markets. In the UK, Askaprice.com offers essentially the same service.

"Business Oportunity" leads have become recently very popular in the multi level marketing (MLM) world, many companies generate "generic" leads which are resold to such companies as Usana and Herbalife. There are other types of leads which are generated for the companies in the health industry as well. They are an extremely cost effective method of acquiring new distributors and customers.