What’s a lead source? Here’s what it is and why it’s important

If you wrote a research paper in college, you may still be haunted by the strict, seemingly arbitrary rules of citations in the MLA, APA, or CMS formats. But there was a good reason to cite your research: you, and anyone reading your paper, needed to know where you got your sources.

It’s no different for sales and marketing teams when sourcing leads. While you’re not sharing your work with a professor these days, your sales reps need to know where and how leads had first contact with your company. This knowledge cultivates a more nuanced experience for every lead, likelier conversion, and better targeted campaigns in the future.

Essentially, identifying and tracking lead sources using customer relationship management (CRM) software enables your sales team to better understand the buyer’s journey and provide personalized content to your leads. Without a proper citation to the source, a lead is less likely to convert.

In this guide, we will define what is a lead source, provide some lead source examples, explain the benefits of implementing a quality lead source report for your business, and offer up some best practices to follow through the lead funnel.

What is a lead source?

A lead source is the specific channel through which a lead first learns about your business. When someone is motivated to find you because they are looking for a particular product or service, the first point of contact—whether it’s a web search, referral, or an Instagram story—is the lead source. Conversely, if you are the one reaching out to a lead via phone, direct mail, or TV ad, these are also lead sources.

Of course, there are any number of ways a potential customer or client can discover you. These will break down broadly into digital or online sources and more traditional ones.

Not only is it important to understand where your sources come from, it is also critical to your business that you manage this information effectively. No matter how you’re generating leads, there are some important distinctions to grasp as well as best practices to follow.

Why does a lead source matter?

For one thing, understanding how a lead has found you aids in successful sales prospecting. If you track where potential customers first learn about your business, you can narrow down the most successful channels in your lead generation efforts and focus on them. With this information, your marketing team can cultivate enticing content to draw leads in or encourage your sales teams to perfect their outbound strategies. In either case, prospecting tools for sales reps are worth investigating to help your reps cultivate quality sales leads.

Types of lead sources

Whether you’re B2C, B2B, startup or enterprise, you need leads. Sales reps frequently cite lead generation and prospecting as the most difficult parts of their jobs—and that makes sense. No matter how good you are at nurturing and closing, you’re always going to need fresh leads to keep your pipeline humming along. So in 2022, where are those leads coming from?

Online lead sources

We live in an increasingly digital world, so it’s no surprise that the internet is a crucial point of origin for sales leads.

Traditional lead sources

While digital sources of lead generation are fertile ground, traditional marketing methods remain critical in sourcing, generating, and nurturing leads through the sales pipeline.

Customer referrals and word-of-mouth are consistent high-quality business lead sources, especially in B2B prospecting. In fact, customer referrals make up 54 percent of B2B leads, leading the way in both digital and non-digital sourcing.

Other non-digital sources include cold calls (whether inbound or outbound), direct mail campaigns, and traditional advertising like billboards, TV, or radio spots.

Lead source examples

Let’s take a look at a few lead source examples: two digital and one traditional.

Let’s say you’re a sales rep working to meet your monthly quota selling a SaaS product. In this market, your buyer persona is an operations executive who needs your valuable tech to streamline their business.

A message arrives in your inbox on LinkedIn from a lead interested in learning more about your product. What’s your source? LinkedIn.

The next morning a lead visits your website and is captured by your CRM when they input their information to unlock a white paper. This time your source is the specific landing page on your website where they provided their information.

That afternoon you speak to a current customer on the phone and you ask them for some referrals. Although 83 percent of customers are willing to offer a referral, only 29 percent of them actually do—because they are never asked. Ask for referrals and log that source as a client referral.

How to track lead source

Lead tracking begins by determining the source of your lead’s first contact with your business. Once the lead is generated, track its source through a strong practice of attribution—assigning credit to the point of origin for that lead. You want to know if an email marketing campaign, Instagram story, or word-of-mouth referral is directly responsible for won opportunities.

When tracking lead sources, it’s important to be granular in your approach. That means providing as much specific detail as possible. The best way to keep track is through CRM platforms. Your sales team will benefit from knowing a lead was sourced not from social media such as Twitter but from YouTube or a blog page. A lead tracking system is critical for compiling, tracking, and analyzing leads as they progress through the lead funnel.

A powerful CRM easily tracks source and attribution data as part of its sales force automation (SFA) technology. Companies can also use custom Urchin Tracking Module (UTM) properties to capture data from organic searches or digital ads. No matter the size of your business, these insights will enable you to determine your most effective lead generation sources and guide future marketing and sales tactics.

Lead sources to measure

The most effective sources to measure depend on your industry, locale, and specific business, but there are several common sources that every company should experiment with. Here are our top five online and traditional sources that are absolutely worth measuring.

The benefits of lead source reporting

Track the source of your leads with a lead source report generated from your CRM software. When you identify a lead’s point of origin with your company, you can improve their experience throughout the buyer’s journey with personalized content and communications using the channels they already prefer to use.

A lead source report that shows you the most effective platforms on which to reach your customers means more quality leads, more conversions, and better marketing ROI.

Lead source best practices

Let’s face it, lead management is complicated. Here’s our list of the five best practices to follow to help you implement a successful strategy for effectively managing and utilizing your sources.

1. Categorize clearly

   
   When categorizing attribution, be granular. Keep it clear, simple, and accurate. Listing “social media” as your source is not useful when you have ongoing campaigns on Twitter, Instagram, and TikTok. Use subcategories like “Social media: Twitter” to identify different channels. Separate these from campaign names which can make reporting more challenging down the road.

2. Be consistent

   
   Use CRM software to help you track sources properly. Never change an attribution once identified. If you encounter duplicate points of origin, reduce confusion by identifying the earliest known interaction.

3. Determine which sources provide qualified leads

   
   Of course you want to bring in high-quality leads. Employ lead gen software to automate and refine that process. Next, determine the quality of your leads with a lead qualification checklist. Finally, examine the sources of those leads. Which sources ultimately convert the most leads into customers? That’s where you want to focus your time and effort.

4. Continue to experiment

   
   The market is constantly changing. What worked five or ten years ago is not the same today. And as your business grows, your audience will grow and change too. Don’t expect your best leads to always come from the same point of origin. Experiment with different strategies and campaigns, but keep careful track of attribution so you can analyze your results accurately.

5. Check results and analyze success

   
   Although you’ll be analyzing throughout the sales process, you should also prioritize a final analysis. Be patient and allow time for these results to come in. Leads need to be converted before you can analyze the success of your methods and sources.
   This data is important because it allows you to connect more effectively with your target audience on the channels they use most often.

A winning sales strategy starts at the source

Understanding the importance of lead sources is just the first step—tracking them and implementing that knowledge comes next. The good news? Tracking is easy with a powerful CRM solution.

Whether you’re a small business in need of anSMB CRM or an Enterprise behemoth, Zendesk is the intuitive CRM for you. Our user-friendly interface offers comprehensive tools to track attribution accurately and compile lead source reports for your team. With this information at your fingertips, it’s simple to implement targeted strategies, ensuring you’re investing your time into nurturing high-quality leads.

You should never be in the dark about where your leads are coming from. Sign up for your free trial today and see how Zendesk can refine your lead generation and sales strategy.