In demand generation marketing, you must cater to and steer potential buyers along the awareness stages—the phases of a buyer's journey that lead them toward becoming aware of your services and products. And using use lead magnets is part of that process.

From a business and marketing point of view, lead magnets are clever, powerful little things. Or they can be... if you use them the right way... If you understand how to use them to get your audience to essentially self-segment.

And when they do, you can then create even more relevant, tailored lead magnets for those segments—and guide them as they advance in their buying journey... toward your products or services.

In this article, we'll explore what lead magnets are, how businesses use them incorrectly, and how to integrate segmentation and lead magnets to better drive demand generation.

What is customer segmentation?

Customer segmentation is the process of dividing potential and existing customers by specific criteria into segments so that you can personalize their experience.

You can segment prospects based on multiple factors, including...

• Age
• Gender
• Personality
• Income
• Interests
• Spending habits

You can also split people into smaller groups with similar characteristics relative to your marketing goals.

In short, segmentation allows you to target and communicate with your audience with a narrower focus and in a way that resonates with them.

There are several types of customer segmentation (such as a behavioral or lead type) and many reasons why it's important.

What is a lead magnet?

Lead magnets are free resources offered to your audience; they are an incentive, encouraging people to permit you to contact them.

Many people have a particular idea of lead magnets and don't realize they can take any form.

A lead magnet is any valuable asset that gets contacts into your database

But it does have to be valuable.

By providing something of value to prospective customers, you'll increase the likelihood that they hand over contact details in return (usually name and email address). Lead magnets act as incentives for leads, permitting you to contact them.

They also provide an opportunity for people to learn more about a business to see whether it might be a good fit for their needs.

What do people often get wrong about lead magnets?

Just because lead magnets can be anything doesn't mean all lead magnets are effective.

There's more to a good lead magnet than gathering contact details. What you then do with that information is also important. Also important: lead magnets should teach you about your audience's interests, allowing you to understand more about them and serve them better.

Many people create something that sounds interesting, such as a blogging checklist, but that doesn't necessarily tell you what kind of service people who downloaded it need, want, or would pay for.

Creating lead magnets with no clear direction or audience will only result in depersonalized, generic content, which then won't offer you valuable insights about those who are consuming that content.

You won't be able to create something your audience wants if you don't know what they're asking for in the first place—or, to put it differently, if you haven't tailored it for a segment you're targeting.

>> Related content: How to create strategic lead magnets

An example of poor segmentation with lead magnets

Let's look at an example of creating lead magnets that don't cater to segmentation.

Imagine being a social media manager and having Customer A and Customer B browsing your website.

• Customer A is a new business owner looking for hints and tips on running his social media. He downloads your "social media marketing checklist" covering critical elements of successfully running social media. It's a popular lead magnet but it doesn't convert because he isn't ready to spend money right now.
• Customer B, however, runs a more established business with the budget to hire a social media manager. But, she doesn't want a checklist; she wants someone to do it for her. You don't have a lead magnet targeted to this demographic, so she doesn't engage with your site.

Customer segmentation informs businesses on how they should be creating lead magnets targeted at different segments.

In other words, different kinds of lead magnets must be made specific to people at different stages of their buying journey.

Lead magnets: What you should be doing

Businesses must determine the awareness level of an audience for every lead magnet. Otherwise, you may offer something to someone who isn't ready... and that person simply won't consume it.

You should reverse-engineer your lead magnet to help your audience access something valuable. But also: to help you learn more about your audience.

It's more than just driving people to hand over their contact details. Lead magnets should offer their consumers something valuable and they should be just as beneficial to your business. They should link into your behavioral profiling and strategy and allow you to build a clear picture of your consumers.

As a business, think about what kind of information you need: How do you help consumers by solving their problems?

But also: how can you use lead magnets to learn more about prospects so that you can help them more appropriately?

It's pretty simple.

Use lead magnets to track where potential customers are in their buyer's journey.

Consider the awareness stages—what problem do they have?