Authors

Lauren Davis, Senior Product Marketing Manager at Autopilot

Guy Marion, CMO & Head of Business at Autopilot (Editor)

Lesson 3: What is Lead Nurturing & How to Start

79% of marketing leads never convert into customers. Lack of lead nurturing is the most common cause of this poor performance.

Lead nurturing helps you build a relationship with potential customers and accelerate their buying journey. By staying in touch regularly, you ensure that your brand comes to mind when they’re ready to buy.

In this lesson, you’ll learn:

why nurture leads
A compelling reason to nurture your leads
 

What is lead nurturing?

Lead nurturing is the process of educating leads and building relationships with potential customers throughout the purchasing process.

According to Forrester Research, companies that excel at lead nurturing generate 50% more sales-ready leads at 33% lower cost.

A typical buyer spends months researching and evaluating solutions before deciding on a vendor. Delivering useful and relevant content to buyers through an automated nurture program drives higher conversion rates, accelerates the buyer’s journey, and improves your sales efficiency.

Let’s examine the process visually.

lead nurturing diagram
How lead nurturing fits into your marketing strategy

After doing a bit of research, new leads enter your database. You direct those that aren’t ready to engage with sales to nurture.

Over time, the content you send builds trust with these leads until they’re ready to start a formal evaluation process. We call this a “reactivated lead.” While these reactivated leads weren’t ready to buy at their initial point of entry, they are now. Voilà—this is lead nurturing in action.

From a technical standpoint, lead nurturing involves the automated delivery of communications—emails, onsite messages, text messages, and more. In Autopilot, we call these strings of communications a “journey”.

Journeys trigger off of either user behavior or timing. They educate recipients with targeted content, while simultaneously building a customer profile so it’s clear when a lead is qualified and ready for sales.

Lead nurturing is the process of educating leads and building relationships with potential customers throughout the purchasing process.

The good news is that it’s remarkably easy to create this nurturing “machine” with Autopilot. Before we describe the six steps for doing so, let’s dive into the benefits and return on investment you can expect from nurturing.

How to Calculate the ROI of Lead Nurturing

Lead nurturing has many benefits:

  • Accelerating your sales cycle
  • Educating people who want to learn more but aren’t ready to buy
  • Growing your revenue by re-activating cold leads and creating new sales opportunities
  • Increasing awareness for your brand or product
  • Increasing lead-to-customer conversion rates
  • Generating more qualified leads, while driving down cost

Despite these benefits, optimizing your first nurture journey can take some time. That’s why it’s important to start with a quantified return-on-investment (ROI) goal, against which you can measure your success.

The two main drivers of calculating expected ROI from lead nurturing are your lead-to-customer conversion rate and your average sales price (ASP).

Here are a few figures for you to reference: 

  • Autopilot customers who’ve implemented a lead nurturing program see a 25-50% increase in conversion for turning new leads into paying customers
  • Autopilot customers reactivate cold (nurtured) leads into paying customers with conversion rates that are three to six times higher than baseline (non-nurtured) rates.
  • Autopilot customers find that nurtured leads become higher paying customers. According to Aberdeen, nurtured leads make 47% larger purchases than non-nurtured leads. Internal testing by Autopilot’s marketing team has found that nurtured leads spend 1.4 times more than baseline ASPs.
Nurtured leads drive 3 to 6x higher conversion rates and 1.4x more revenue compared to non-nurture leads

Based on these assumptions, you’ll want to forecast ROI separately for nurturing a) new leads and b) reactivating stale leads.

A. Calculate the ROI of nurturing new leads

The ROI of lead nurturing comes from the revenue generated from nurtured leads, compared to those who are not nurtured.

lead nurturing ROI formula
How to calculate the ROI of nurturing new leads

1. Calculate your current monthly revenue from new leads. 
Take the number of new leads you bring in each month. Multiply that number by the rate at which you convert them (currently), and then multiply that by the average amount each customer spends.

New Leads x Current Conversion Rate x Current ASP = Monthly Revenue from New Leads

For example, if your baseline lead-to-customer conversion rate is 10%, and you attract 500 new leads a month, that’s 50 new customers each month. With an ASP of $100 per customer, that converts to $5,000 in new revenue for that month.

2. Calculate the new monthly revenue generated from nurtured leads. 
Remember: When done well, lead nurturing should increase your conversion rate by at least 25% and your ASP by 40%.

New Leads x Increased Conversion Rate x Increased ASP = Monthly Revenue from New Nurtured Leads

Using the above example, lead nurturing should increase our conversion rate from 10% to 12.5% and our ASP from $100 to $140. If 12.5% of 500 leads convert, that’s an additional 12.5 customers for that month. At an ASP of $140 per customer, that’s $8,750 in surplus revenue.

3. Calculate the difference between the two. 
Take your estimated monthly revenue after nurture and subtract the monthly revenue you currently generate from new leads each month. The difference is your predicted lead nurturing return on investment.

In our example, we subtract $5,000 (monthly revenue from new leads) from $8,650 (monthly revenue from new nurtured leads): $8,650 – $5,000 = $3,750

Lead nurturing gives us an extra $3,750 dollars per month or $45,000 in incremental revenue per year. That’s a 75% increase in total revenue just through effective nurturing of new leads.

B. Calculate the ROI of reactivating old leads

What about the costly leads that are sitting idle in your database? They clearly had a relevant need or interest in your solution in the past. Yet, apart from sending them occasional newsletters, they likely haven’t heard from you in months (or even years). If you aren’t actively nurturing these leads, you’re leaving money on the table.

Just ask Instapage. They planned to purge 55,000 unengaged contacts from their database that had not taken any action in the past 10 email sends. Before throwing them out, Instapage built a lead nurturing journey. In eight weeks, they generated $30,000 in annual recurring revenue and converted leads with a six times higher conversion rate compared to their baseline.

Since these leads otherwise would have been lost, that $30,000 is revenue generated purely from lead nurturing.

lead reactivation ROI formula
How to calculate the ROI of reactivating stale leads

The ROI of reactivating old leads is relatively simple. It’s the revenue that you generate from stale leads in your database, who otherwise wouldn’t have converted. Let’s walk through it.

1. Estimate how many leads you’ll re-engage each year.
Armed with a solid nurture journey, you can conservatively expect to reactivate 2-5% of your contact database.

Let’s say you’re sitting on 50,000 cold leads. If you can reactivate just 2% of those, that’s an additional 1,000 leads per year.

You can expect to reactivate 2 to 5 percent of your contact database with a solid lead nurturing journey

2. Calculate how many of these leads will convert into new customers.
It may take longer for these leads to surface, but when they do, they’re likely further along in the buyer’s journey—leading to higher conversion rates. It’s safe to estimate that your nurtured leads will convert at three times your baseline.

Continuing with the example above, our conversion rate for these leads would be 30%, three times more than the 10% conversion rate we see with new leads. That’s an additional 300 customers per year.

3. Now multiply those new customers by the ASP.
Remember: Nurtured leads spend about 40% more than new leads. With an ASP of $140, those 300 customers contribute $42,000 in additional revenue per year: 1,000 (reactivated leads) X .3 (conversion rate) X 140 (ASP) = $42,000 (revenue from reactivated revenue)

The potential ROI of lead nurturing

In the examples above, we’ve shown how a company that generates 500 leads per month, with an ASP of $100, and 50,000 contacts in their database, can generate $87,000 in revenue each year from new and reactivated leads through lead nurturing.

While this is a terrific result by itself, a less tangible (but equally valuable) outcome is that you’ve educated your customers. And nurtured leads that become customers are your best customers. They tend to extract more value from your product, purchase more often, spend more, stay customers for longer, and drive more referrals.

If you haven’t done any nurturing in the past, you’ll likely see an initial spike in reactivated leads when you launch your first journey. As new leads go cold, you’ll have an ever-growing base of cold leads to reactivate—meaning the ROI of nurturing cold leads is more than a one-time thing. So how do you get started?

The 6-step guide to lead nurturing

To implement a lead nurture program for your business, follow these six steps:

  1. Define your goals for nurture
  2. Identify and segment your contacts
  3. Define your content strategy
  4. Gather, create, and repurpose irresistible content
  5. Build your nurture journey in Autopilot
  6. Measure your results against essential lead nurturing KPIs

Step 1. Define your goals for nurture

The most successful lead nurturing programs start with clear goals and upfront pipeline and revenue targets. The goals you define will influence how you craft your nurture journeys and set about educating and qualifying leads.

Here are some common lead nurturing goals:  

  • If you have a sales team, generating new revenue by qualifying more leads for sales
  • If you don’t have a sales team, generating new revenue by converting more new leads into customers
  • Generating reactivation revenue by nurturing stale leads from your database to surface any qualified leads who fell through the cracks and/or encourage repeat purchases
  • Retaining more revenue by educating and staying in touch with new leads, recent buyers, and existing customers

Once you’ve identified these goals, make sure you have the necessary measures in place to report on results and performance. Start with identifying what you’d like to track and where these reports will live. We’ll go into some suggestions further in step 6.

Most reporting can be pulled within Autopilot, from email reports to conversion metrics. These reports don’t require any upfront configuration. However, if you’re using a separate CRM (e.g. Salesforce) or have a company-wide analytics platform, you’ll likely want to enlist the help of your marketing and sales operations team and/or your analytics team ahead of time. To report on certain results, like revenue, you may also need to connect a particular app or create a custom field to track it.

The most successful lead nurturing programs start with clear goals and upfront pipeline and revenue targets.

You don’t need to have everything set up before building your lead nurturing journey. But it’s helpful to have everything in place before launching, so refer back to this throughout the process.

Step 2. Identify and segment your contacts

Now that you’ve defined your lead nurturing goals, the next step is to create the contact and customer segments you want to target in your nurture journey.

You can easily develop a set of rich target segments in Autopilot by combining the following contact data sources:

  • Demographic information: Who are these people? Demographic data includes information like company, industry, job title, and location, which are gathered from a range of sources including email lists, form submissions, and your CRM platform.
  • Behavioral data: What web, email, or in-product behavior have your contacts engaged in? Behavioral data incorporates email activity, webpage visits, in-app events, or billing-related actions.
  • CRM status (if applicable): How have your sales or success teams engaged these contacts? Segment contacts based on whether they’ve spoken with sales, what their lead status is, who the lead owner is, which territory they are in, or what campaigns they’ve interacted with.

Use a combination of these filters to define the groups you want to target with your lead nurturing journey. They should all be individuals who opted in and showed interest at some point, but need a nudge to continue their journey.

Here are some common segments we see companies target:

  • One-touch wonders: Those who took an action that captured them into your database (such as downloading a white paper or attending an event you sponsored) but you never heard from again.
  • Non sales-ready leads: Leads that sales reviewed, but didn’t engage with and instead marked as “not sales ready”.
  • Cold leads: Leads that have sat in your database for months without any activity – not even an email click or website visit.
  • Pre-signup leads: Leads who’ve identified themselves by subscribing to your content, but have not yet signed up for an account or trial.

If you’d like, split your lead nurturing group into segments based on target personas or key industries to better align your messaging. If you think that’s necessary for your business, stick with two or three segments and create a separate nurture journey for each one.

Here are some additional segments:

  • Verticals: Break out your key verticals by using industry filters to determine if someone is in manufacturing, financial services, media, eCommerce, consulting, etc.
  • Company size: SMBs have different challenges than enterprises. Use firmographic data to segment your contacts based on company size, number of employees, or even market size.
  • Job title: Executives care about results, while individual contributors care about making their day-to-day easier. If you sell to both, try separating the two groups to tailor communications.
  • Department: If you have buyers in multiple departments, break these out. Marketing and sales may use the same software, but they do so in very different capacities. If you don’t have department-level information but do capture their job titles, try pulling leads into your smart segment based on keywords (e.g., title contains “marketing” or “sales”).
  • Geography: A company in France works differently than those in the U.S. Similarly, companies in Texas likely don’t need to be aware of California laws. If your business is distributed, it probably makes sense to create nurture journeys for each location.

It’s your job to ensure each contact gets the information they need to take the next step. Understanding your audience and their needs will make it easier to select appropriate content.

Once you’ve identified your target segments, it’s time to focus on what content will help contacts progress in their buyer’s journey.

Step 3. Define your content strategy

There are three main stages in the buying cycle, each with its own unique conversation happening in the lead’s mind. Early on, individuals are looking to do research about a general topic or pain point. From there, they move into evaluating potential solutions. Finally, they’re ready to make a purchase.

The trick is to match the type of content you’re sending to where leads are in the buyer’s journey. We call this the nurturing content funnel.

Nurturing content funnel
nurturing content funnel

At the top of the funnel, contacts don’t know much about you. They’re new to your brand (and perhaps even your industry), which is why they’ve engaged so little. At this point, the most effective content builds your company narrative by linking to industry trends, pain points, and shareable facts, all while positioning your brand as an industry leader.

In the middle of the funnel, contacts are further into their buying journey. They’ve identified an interest or pain point, but need to learn more about your company, product, or service. Send them customer proof points, tools that help them evaluate your solution, and company reviews.

At the bottom of the funnel, contacts are familiar with your brand and are ready to take action.  Now’s the time to send targeted call-to-action emails, such as invitations to set up a demo or sign up for a trial.

With an understanding of the role of content at each stage, it’s time to take a look at your existing content and build your own content funnel.

Step 4. Gather, create, and repurpose irresistible content

The most important element of your lead nurturing journey is the content – what topics you address, what assets you include, and what emails you send.

In this section, we’ll dig into how to do an audit of your existing content, what content works best, and how to design emails for your lead nurturing journey.

1. Do a content audit. People often get discouraged by their “lack of content”, and give up on nurture before they’ve even started. Whether you have a large content library or one treasured ebook, chances are you have more content than you think.

Think through all the resources you have at your disposal. Reach into your company’s archives and repurpose what you can. As long as it’s valuable, it’s okay if the content is a few months (or even years) old.

Here are a few places to extract content from:

  • Blog. Blog content is a great source for top-of-funnel content. Pull a list of all of your published posts, then sort by popularity (shares or views) to call out posts you should highlight.
  • Website. Your website contains a treasure trove of valuable content—filled with information about products, pricing, company background, and customer stories.
  • Emails. Review past announcements, newsletters, or promotional emails that you’ve sent to your customer list. Repurpose what you can to reignite stagnant leads.
  • Social channels. These show you exactly what your audience is talking about! Social channels are loaded with conversations that are prime for repurposing into lead nurturing emails or SMS. Pay special attention to tweets you can expand upon.

Once you’ve taken stock of your existing content, select the best pieces of content to captivate your audience and get them clicking!

2. Identify the assets that convert best. Content takes many shapes – from blog posts to videos, diagrams to infographics.

If you can, try to include a good mix of asset types. Everyone absorbs content differently. Plus, some messages are better communicated through specific mediums. Below are some content types that work well for nurture.

White papers and eBooks are long-form pieces of high-level content. You probably see a lot of “Definitive Guides”. Well, that’s because they convert! White papers are ideal for diving into more complex topics. They’re also great because you can gate them behind a form.

eBook examples from Autopilot (left) and LiveChat (right)

Thought leadership articles can be leveraged to convince folks who’re new to your space why they should care about your product or solution in the first place.

Thought leadership article examples in TechCrunch (left) and Entrepreneur (right)

Webinars are an effective way to engage more directly with leads in a one-to-many format. You can present a range of content, from early-stage content all the way to late-stage content. Plus, prospects get their questions answered in real time.

Webinar examples from Infer (left) and Effin’ Amazing (right)

Infographics provide an engaging and skimmable format for data-driven storytelling. Present compelling data points you’ve found or your original research findings in an infographic.

Infographic examples from MarketingStrategyX.com (left) and Home Depot (right)

Newsletters enable you to deliver multiple updates at once. While they’re often product or company specific and are an ideal format for delivering enablement content, try creating an industry newsletter (like our Just Landed) with top-of-funnel content to engage prospects early on.

Newsletter email examples from Autopilot (left) and Crunchbase (right)

How-to videos are another great medium to experiment with. These videos are often cheaper to produce, show your product in action, and enable users to engage.

How-to video examples from Invision (left) and Slack (right)

Customer testimonials are a form of validation. Prospects hear about the problems you solve and the results you help others achieve straight from your customers’ mouths. Use customer testimonials to boost your credibility with social proof.

Customer testimonial examples from Instapage (left) and Zenefits (right)

Free trial. While it doesn’t work for all products, offering a free trial is a great way for leads to try your product before committing to anything. Sometimes the best way to learn is by trying it for yourself.

Free trial landing page examples from UserVoice (left) and Autopilot (right)

Some people prefer long-form white papers or ebooks, while others learn best from videos and webinars. Still others prefer more skimmable content, like infographics. You need to take these different preferences into consideration if you want your lead nurturing journey to capture your audience’s attention.

3. Craft emails that solicit clicks. Based on the content you select for your nurture journey, create summary emails that hook your reader and link them to the source content.

Use a simple, one-column, on-brand HTML template for your lead nurturing emails. Reserve plain-text emails for more personalized communications, such as invitations to a custom demo or for feedback. Below is an HTML email example that we use for our own lead nurturing emails:

Lead nurturing email example
Lead nurturing email example

Keep it short and to the point. The goal here is to grab your reader’s attention and have a clear call to action.

That’s the secret to great lead nurturing: It’s not about self-promoting. It’s about delivering value, which draws your contacts back for more.

Step 5. Build your nurture journey in Autopilot

Now that you have great content in place, the next step is to structure your lead nurturing journey.

As mentioned earlier, lead nurturing is a system that allows you to send a closely related series of automated emails, SMS, on-site messaging, or direct mail to an early stage lead in order to educate them before they make a purchase or engage with sales.

Timing your nurture emails
The best send frequency depends on the length of your sales cycle. If people typically purchase right away, you’ll want to reach out more often so you stay top of mind. If your sales cycle is more than a few months, emailing too often could come across as annoying.

If you’re unsure, a simple starting point is to send a series of three to five emails, spaced about 10 days apart. Once you’ve seen results from running your contacts through this basic nurture journey, iterate from there.

Below are two nurture journey templates you can modify or use as is.

Start with our basic 4-email nurture sequence

Basic 4-email nurture journey
Use this customer journey template to nurture your contacts with four emails - click image to view high-res

Autopilot’s “Nurture your contacts with 4 emails” guide is a very simple drip campaign that leads contacts down the funnel with four emails. When a lead clicks any email, they’re sent a call to action to engage with sales. To learn more about this approach, see our Start Basic Lead Nurturing lesson.

If you’re nurturing for the first time or lacking content, this is a great place to start. Don’t overwhelm yourself with all the possibilities. Instead, start simple.

For those of you who want to take a more nuanced approach, include a third tier in your accelerator structure. Doing so adds another qualification step prior to engaging directly.

Get more advanced with our lifecycle nurture machine

Lifecycle lead nurturing journey
Use this customer journey template to nurture your contacts throughout the lifecycle. This is the actual nurture journey we use at Autopilot - click image to view high-res

For a more personalized approach, try our “Nurture leads into paying customers” guide. It’s an advanced lead nurturing framework that accelerates contacts through the journey based on their stage in the purchasing process. In this more sophisticated journey, we tailor our messaging based on whether the contact self-identifies as being in the early, mid, or late stage of buying.

If you have lots of content or a longer, more in-depth sales cycle, this nurture journey is ideal for you. For an in-depth walkthrough of this nurture strategy, see our Lifecycle Lead Nurturing lesson.

Once you’ve identified a strategy that works for your company and built your nurture journey in Autopilot, hit publish and watch the conversions fly in!

6. Measure your results against essential lead nurturing KPIs

Your job as a marketer doesn’t end once your journey is published. It’s just as important to understand what’s working and what’s not. That’s why your final step in crafting an effective nurture journey is nailing the metrics.

Lead nurturing can take time. You may not see mind blowing results right away, and that’s okay. But you should definitely track your performance from the start. Doing so will help you not only identify wins, but also hone in on areas to optimize and improve.

When diving into your results, pay attention to the key metrics that matter to your business.

lead nurturing KPIs
Leading nurturing KPIs

Content engagement: Keeping an eye on engagement statistics helps you identify what’s working and what can be improved, enabling you to optimize your journey over time.

Use the Message Timeline in Autopilot Insights to track content engagement
track content engagement
  • With Autopilot Insights, it’s easy to view your open and click-through rates to identify both high-performing emails and those you need to tweak. If each touchpoint is relevant to the contact’s needs at the time, you’ll see your open and click rates increase dramatically. In our own experiments, we’ve seen 10-15% open rates for early-stage leads (people who are just getting to know us) and upwards of 40-50% for interested prospective buyers who’ve engaged with our top-performing content.
  • Use your click-through data to discover what types of content resonates with your audience. For example, do they prefer eBooks or videos?
  • Don’t forget to pay attention to your unsubscribe rate, which helps you adjust your send frequency. Aim for a rate below 0.5%.

Lead generation: These metrics are the first signal that things are working. Are you reaching the goal you outlined at the beginning?

  • Leads from nurture are easy to track with Autopilot Insights. Create a smart segment for how your company defines a lead, and set that as your goal for the journey. Insights will tell you how many leads came from your nurture journey – no calculation required.
Set a goal for leads converted from your nurture journey using Insights
  • If you have a sales team, track pipeline generated from nurtured leads as an early indicator that nurture is performing on the sales side. Are the nurtured leads creating more opportunities than non-nurtured leads? You’ll most likely report on this in your CRM, such as Salesforce, if you’re using one.
  • You’ll also want to track your journey conversion rate. This refers to the conversion rate you’re seeing for the goal you defined with Insights. With Insights, you can quickly see how you’re trending.
Track conversion rates using Insights
goal tracking

Revenue: Finally, is it all worth it? According to Aberdeen, nurtured leads make 47% larger purchases compared to non-nurtured leads. These numbers will obviously take the longest to populate, but you may be pleasantly surprised with what you find.

  • Measure the revenue impact of your nurture journeys by identifying new sales and total revenue generated from nurtured leads. One way to do this is to create a “nurture influenced” smart segment in Autopilot to track revenue generated from new buyers who were also members of your nurture journey.
  • Track the average sales price for new deals across sales channels, customer segments, and/or product categories. Assess the payback period and ROI of your nurturing and other marketing programs, then allocate sales and marketing resources to the higher-paying segments.

Wrapping it all up

Launching a lead nurturing program will increase your brand awareness, engage and educate leads, stimulate conversions, and grow your bottom line. Companies that successfully nurture and reactivate stale leads grow faster while spending less on customer acquisition.

To get started with lead nurturing follow the steps outlined in this lesson:

  1. Determine your goals for nurture
  2. Identify and segment your target contacts
  3. Define your content strategy
  4. Gather, create, and repurpose irresistible content
  5. Build your nurture journey in Autopilot
  6. Measure your results against essential lead nurturing KPIs

Lead nurturing takes time to plan, launch, and improve, but once you launch your journeys, the impact on your business will immediately be visible. The most important thing to remember is that you’ll see a huge benefit from even the most simple nurture journey!

Further resources

Want to learn more about lead nurturing? Check out these helpful resources:

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