Browse Definitions :
multichannel marketing digital marketing

lead generation

What is lead generation?

Lead generation involves identifying and attracting potential customers, then nurturing and, ultimately, converting them into paying customers. A fundamental process in marketing and sales, lead generation is a cornerstone of business growth. It delivers a steady stream of potential clients, or leads, to sales and marketing teams. Some of the leads have already expressed interest in a brand's product or service, while others require a more basic explanation of its benefits -- in hopes of generating brand enthusiasm.

At its core, lead generation creates and maintains a pipeline of potential customers, typically gathered through various marketing campaigns and outbound engagement from sales teams. However, caring for and converting these leads into loyal, paying customers requires flexibility, nuance and perseverance.

How lead generation works

Lead generation includes a series of strategic steps and methods tailored to a specific target audience and industry. Regardless of the details, however, here's how strong lead generation typically unfolds:

  • Identify the target audience. The first step in lead generation is defining the ideal customer profile. Create buyer personas that outline demographics, preferences and pain points, then add existing customer data to this research to align and improve business prospects.
  • Create can't-miss content. Teams must develop and offer valuable content to attract potential customers and, in turn, collect their even more valuable data. This information, once provided, serves as an initial payment of sorts. In return, the lead expects access to quality blog posts, e-books, webinars, white papers or any content that addresses their specific needs and interests.
  • Leverage multiple channels. To maximize reach, utilize various marketing channels such as social media, email marketing, content marketing, search engine optimization (SEO) and pay-per-click (PPC) advertising. Since different channels suit different leads at different stages in their journeys, maintaining an effective presence across each channel can create comfortable spaces for these leads and forge well-grounded connections.
  • Spotlight each call to action (CTA). Every piece of created content includes a clear and compelling CTA that encourages visitors to take the next step within their customer journey, usually by filling out a form or contacting the business directly. CTAs act as a touchpoint for organizations seeking direct engagement with visitors searching for relevant content.
  • Collect lead capture forms. When leads engage with content on a company's website, lead capture forms collect their information. These forms typically request contact details such as name, email address, phone number and sometimes information like company size or industry. When combined with progressive profiling from marketing automation tools, lead capture forms allow marketing teams to increase data collection.
  • Embrace lead scoring and segmentation. Lead scoring helps sales and marketing teams prioritize leads based on interest and engagement. The higher the score, the higher the likelihood a customer is sales-ready. Segmenting a lead allows teams to tailor their marketing efforts to a lead with particular tastes. Unique communications, targeted offerings or automated workflows create personalized experiences based on the prospect's segment.
  • Nurture leads. Once leads are secured, building a relationship follows. Email marketing, personalized content and automated drip campaigns are effective ways to nurture leads and draw them toward a purchase decision. List segmentation, progressive profiling on forms and automated nurture workflows are tools teams employ to shorten the time a lead becomes a marketing-qualified lead (MQL). 
  • Increase conversions. The ultimate goal of lead generation is to convert leads into paying customers. This may involve offering discounts, trials or personalized recommendations based on their interests and behavior. Conversion metrics can also assess form views to submissions, determine paid advertising conversions from a completed action or direct the prospect into new business through the sales pipeline.
  • Measure and optimize. Continuously monitor the performance of lead generation efforts with the tools used to execute the campaigns. Analyze key metrics like conversion rates, click-through rates and return on investment (ROI). Use this data to refine strategies for better results, or replicate campaigns that have performed well within a target segment.

What is a lead?

Leads are the critical component of lead generation, but not all leads are the same. As human beings, leads vary in their readiness to make a purchase and their appetite to interact with a business. Here are some common types of leads:

  • Cold leads. Cold leads are individuals or businesses indicating minimal or no interest in an organization's offerings. They often need significant nurturing to become warm leads. These leads, perhaps, visited a site but did not interact with any content, or they met the company's ideal customer profile, leading sales to make a cold call and delivering a message that may develop into a warmer lead.
  • Warm leads. Warm leads show moderate interest in a product or service being offered. They interacted with content, subscribed to a newsletter or attended a webinar. They are more receptive to marketing efforts and require pursuit through specific nurture campaigns.
  • Marketing-qualified leads. These leads have shown a higher level of interest in the company's product or service, acquiring a lead score high enough to begin the marketing-to-sales handoff. However, they require further nurturing to move them closer to a sale.
  • Sales-qualified leads. SQLs have a high likelihood of making a purchase soon. These leads have been vetted by sales through detailed conversations. SQLs typically engage more deeply with content and often previously requested a demo or pricing information.
  • Hot leads. Hot leads are highly engaged and primed for conversion. They demonstrate a strong interest in a company's offerings and actively seek a solution to their problem. Both marketing- and sales-qualified leads are typically hot leads. 
  • Inbound leads. Inbound leads find a business through their own research or online searches. They approach the business voluntarily, making them more receptive to continued messaging and personalization of content, as well as more likely to become an MQL or SQL.
  • Outbound leads. Outbound leads are generated through cold calling or email campaigns. These proactive outreach efforts are often less warm but retain value if targeted effectively. Outbound leads match the persona profile of an organization that has not yet engaged with any content.
  • Qualified leads. These leads meet specific criteria -- budget, company size, industry or geography, for example -- set by the business. Qualified leads are often marketing- and sales-qualified leads if they have taken enough action. More importantly, these leads represent specific persona criteria that make them valuable prospects.
  • Unqualified leads. Unqualified leads do not meet any predefined criteria and are unlikely to become customers. However, they have value for market research or future targeting. Another form of unqualified lead, for example, engaged sufficiently with marketing to become an MQL, but sales did not agree.

Understanding the different types of leads allows businesses to tailor their marketing and sales strategies to address the unique needs of each group, ultimately increasing the chances of conversion.

Why is lead generation important?

Lead generation plays a pivotal role in the success and growth of businesses across various industries. Here are several compelling reasons why lead generation is crucial: 

  • It fuels business growth. Lead generation provides a consistent influx of potential customers, ensuring a steady flow of growth opportunities. Without leads, businesses stagnate and eventually decline; new business sales, on the other hand, help offset any existing customer turnover or add to a growing customer base.
  • It's cost-effective marketing. Compared to traditional, broader advertising methods, leads more likely to convert can be targeted through lead generation, lowering marketing costs.
  • ROI increases. By focusing on leads more likely to convert, companies improve their ROI. In this case, businesses are spending resources on prospects with a higher likelihood of becoming paying customers.
  • Customers provide insights. The process of lead generation involves collecting data and insights about the target audience. This information shapes the marketing strategies and product offerings of successful companies. It is collected from the prospect's interactions or form fills on websites or landing pages.
  • Sales efficiency improves. Sales teams work more efficiently when given qualified leads, producing higher conversion rates and reducing time spent on poor prospects. Lead scoring and lead tagging help sales to prioritize their outreach to warm, hot and engaged audiences.
  • It's a competitive advantage. Effective lead generation strategies give businesses an edge by allowing them to reach potential customers with valuable content before their competitors.
  • Long-term customer relationships flourish. Lead generation doesn't end at the point of conversion. Nurtured leads can become loyal customers who make repeat purchases and refer others to a business they trust.
  • It secures a company's digital relevance. Consumers today conduct extensive online research before making purchasing decisions, and lead generation helps businesses stay relevant and accessible to their target audience, providing various touchpoints and engagement activities within the customer journey.

Lead generation strategies

Lead generation strategies are the methods and tactics employed by businesses to attract, capture and nurture leads. The right strategies depend on the target audience, industry and specific business goals. Following are key areas in which effective lead generation strategies can elevate a business above its competitors:

  • Content marketing. Create high-quality, informative content that addresses the needs and pain points of the target audience. This can include blog posts, e-books, videos, webinars and infographics.
  • Social media marketing. Utilize social media platforms to initiate engagement with an audience. Share valuable content and run targeted advertising campaigns to reach potential leads.
  • Email marketing. Build and segment email lists to send personalized messages and offers to leads. Drip campaigns nurture leads over time, and the right segments placed into the right workflows raise that content's long-term relevance to interested leads.
  • SEO. Optimize the company's website and content to rank higher in search engine results, making it easier for potential leads to find the business, its products and services.
  • PPC advertising. Run paid advertising campaigns on platforms such as Google Ads, Microsoft Ads and social media to target specific keywords and demographics. These can be search ads or display retargeting from lists of website visitors who have not yet converted.
  • Landing pages. Create dedicated landing pages for marketing campaigns to capture lead information through forms and CTAs. These landing pages showcase the content's value and encourage a visitor to act on the offer.
  • Lead magnets. Offer valuable resources, such as e-books or templates, in exchange for lead contact information.
  • Webinars and workshops. Host online events that provide in-depth information on topics relevant to the audience, requiring registration for attendance. This aids data capture, engagement and identifying warmer leads through lead scoring.
  • Referral programs. Encourage existing customers to refer others in exchange for incentives or rewards. Rewards programs build loyal customers who often spread information about their experience through word of mouth.
  • Chatbots and live chat. Implement chatbots to engage with website visitors and gather lead information. Live chat can provide real-time assistance to potential customers, and it's a newer channel that prospects enjoy. 
  • Networking and partnerships. Build relationships with other industry businesses and organizations to gain access to their audience.
  • Customer reviews and testimonials. Encourage satisfied customers to leave reviews and testimonials that serve as social proof and generate trust among potential leads.
  • Content syndication. Sharp businesses share content on carefully selected third-party websites, forums and industry publications to expand their reach. These include membership websites and other partnerships with brands that share aligned goals and target audiences.
  • A/B testing. Continuously test and optimize lead generation strategies to improve conversion rates and overall effectiveness.

This was last updated in October 2023

Continue Reading About lead generation

  • SD-WAN security

    SD-WAN security refers to the practices, protocols and technologies protecting data and resources transmitted across ...

  • net neutrality

    Net neutrality is the concept of an open, equal internet for everyone, regardless of content consumed or the device, application ...

  • network scanning

    Network scanning is a procedure for identifying active devices on a network by employing a feature or features in the network ...

  • strategic management

    Strategic management is the ongoing planning, monitoring, analysis and assessment of all necessities an organization needs to ...

  • IT budget

    IT budget is the amount of money spent on an organization's information technology systems and services. It includes compensation...

  • project scope

    Project scope is the part of project planning that involves determining and documenting a list of specific project goals, ...

  • director of employee engagement

    Director of employee engagement is one of the job titles for a human resources (HR) manager who is responsible for an ...

  • digital HR

    Digital HR is the digital transformation of HR services and processes through the use of social, mobile, analytics and cloud (...

  • employee onboarding and offboarding

    Employee onboarding involves all the steps needed to get a new employee successfully deployed and productive, while offboarding ...

Customer Experience
  • chatbot

    A chatbot is a software or computer program that simulates human conversation or "chatter" through text or voice interactions.

  • martech (marketing technology)

    Martech (marketing technology) refers to the integration of software tools, platforms, and applications designed to streamline ...

  • transactional marketing

    Transactional marketing is a business strategy that focuses on single, point-of-sale transactions.