What is lead generation in marketing? Your complete guide

Lead generation is the act of cultivating new potential customers, and it continues to be a crucial focus point for many businesses.

However, 61% of marketers rank lead generation as their number one challenge, suggesting it’s tricky to get right.

There are many different channels marketers can use for their lead-generation strategies, including email, social media, and content. 66% of marketers are generating leads from social media (with LinkedIn being the most effective for B2B), and 42% of companies consider email to be one of their most important lead-generation channels.

In this guide, we’ll take you through the fundamentals of lead generation, including:

What is a lead?

A lead is a potential customer that has expressed an interest in a company’s product or service. Interest refers to someone who has shared some kind of contact information with that company, like an email address, phone number, or social media account.

Types of leads

Understanding the different types of leads allows you, as a revenue marketer, to effectively tailor your lead generation and lead nurturing strategies.

By segmenting leads based on the prospect’s level of engagement, intent, or qualification, you can deliver more personalized and targeted messaging and experiences, increasing the likelihood of converting them into loyal customers.

Let’s dive into the different types of leads:

Marketing qualified lead (MQL)

MQLs are contacts that have engaged with your marketing team but aren’t ready to receive a sales call. They may have taken an action like filling out a form on a landing page to gain access to gated content.

Sales qualified lead (SQL)

SQLs are prospects that have taken actions to indicate their interest in becoming a customer. An action might include filling out an FAQ form and asking questions directly about a product or service.

Cold leads

Cold leads are prospects who have shown minimal or no prior engagement with your brand or marketing efforts. These leads are typically at the early stages of the buyer's journey and have yet to demonstrate specific interest or intent.

Cold leads require additional effort and nurturing to move them along the sales funnel and convert them into warm or sales-qualified leads.

Warm leads

Warm leads are prospects who have shown some degree of interest or engagement with your brand or marketing efforts. They may have interacted with your content, attended webinars or events, or reached out for more information.

Warm leads are further along in the buyer's journey compared to cold leads and have demonstrated some level of potential interest in your product or service.

Inbound leads

Inbound leads are generated through inbound marketing strategies, where prospects find and reach out to your brand organically. These leads often come through channels such as website contact forms, inbound calls, or direct messages.

Inbound leads tend to have higher conversion rates since they’ve actively sought out your business based on their own research or need.

What is lead generation?

Lead generation is the first step for moving prospects along the buying process.

It’s the process of converting MQLs into customers through careful nurturing, with lead generation strategies such as producing useful, informative content, or using engaging calls to action (CTAs). It’s no longer enough to reach people with generic email blasts.

Today’s consumers expect more, they want solutions tailored directly to their needs. And there’s far more competition these days from rival businesses for companies not to engage with lead generation.

Lead generation consists of consistent messaging across multiple channels with a focus on informing customers and cultivating meaningful relationships with them.

This process in turn then increases the quality of leads at the bottom of the sales funnel. With the right lead generation tactics, you can gain a prospect's contact information to send targeted content that’ll eventually lead to them becoming paying customers.

Why is lead generation important for revenue marketers?

Lead generation drives customer acquisition, creates sales opportunities, enables targeted marketing, fuels revenue growth, and provides valuable data and insights. By implementing effective lead-generation strategies, you can establish a strong foundation for sustainable business growth and success.

Key benefits of effective lead generation

Lead generation is crucial for revenue marketers because it serves as the foundation for driving business growth and increasing revenue. Here are a few key reasons why lead generation is important:

Customer acquisition: By generating a steady stream of leads, you can expand your customer base and acquire new customers.

Sales opportunities: Leads obtained through effective lead generation efforts provide valuable sales opportunities. These leads are typically individuals or businesses that have expressed interest in a product or service, making them more likely to convert into paying customers.

Targeted marketing: By understanding your target market and buyer personas, you can tailor your messaging, offers, and marketing campaigns specifically to the needs and preferences of your potential customers. This targeted approach enhances the effectiveness of marketing efforts and improves the chances of converting leads into customers.

Revenue growth: The primary goal of revenue marketing is to drive business growth and increase revenue. By consistently generating high-quality leads and effectively nurturing them through the sales funnel, you can increase conversion rates, close more deals, and ultimately boost your revenue.

Data and insights: You can gather information about leads' preferences, pain points, and engagement levels, which can inform future marketing strategies and help optimize campaigns for better results. This data-driven approach enables you to make informed decisions and refine your tactics to maximize your return on investment (ROI).

Lead generation vs demand generation

Lead and generation are separate strategies that can be used in tandem is create a successful marketing campaign.

Whereas lead generation turns prospects into warm leads, demand generation creates that initial awareness and interest in a product and service. So, they take place at different stages of the sales funnel.

Our guide on demand generation touches on this further, along with how to use demand and lead generation in your marketing strategy:

How to generate leads

It’s important, when generating leads, that you’re aligning your strategy with your target audience and their preferences. What might work for one segment, may not work for another. For example, using social media marketing for a more elderly demographic may not work as effectively.

It’s crucial to test and optimize your approach to find the most effective methods for your audience and nurture them toward conversion.

For now, let’s take a look at some methods and strategies that revenue marketers can use to generate leads successfully…

Lead magnets

Picture this: you offer valuable resources or incentives to potential leads, like e-books, whitepapers, case studies, templates, checklists, or any other content that addresses their pain points or provides valuable insights. It's a win-win!

By offering these lead magnets, you become a magnet yourself, attracting leads and enticing them to share their contact information with you. It's an effective way to start building relationships and nurturing those leads.

Exclusive content

Who doesn't love being part of something special, right? By creating exclusive content that is accessible only to leads, you can capture their interest and encourage them to take action. Think webinars, premium video content, industry reports, or expert interviews.

When leads have to provide their contact details to access this premium or exclusive material, it adds value and creates a sense of exclusivity. It's a fantastic strategy to demonstrate your expertise and nurture leads through their buyer's journey.

Calls to action (CTAs)

These little prompts play a crucial role in lead generation. Strategically placing them within your marketing assets, like websites, landing pages, blog posts, or emails, can make a world of difference.

Effective CTAs with clear messaging and compelling design grab the attention of your visitors or readers and encourage them to take specific actions, such as signing up for your newsletter, downloading a resource, or requesting a consultation.

Don't underestimate the impact of well-crafted CTAs - they can significantly boost your lead generation efforts.

Speaking of CTAs... 😉

Referrals

You already have a loyal customer base, right? Well, leveraging their networks can be a highly effective and cost-efficient lead generation technique. Encourage your existing customers or clients to refer their friends, colleagues, or contacts who could benefit from your product or service.

To sweeten the deal, offer incentives for successful referrals, such as discounts, rewards, or exclusive access. Referrals often result in high-quality leads because the trust and credibility established through the referral process carry over.

Content marketing

Content marketing is another vital strategy for lead generation. By creating valuable and relevant content, like blog posts, articles, videos, podcasts, or infographics, you can attract your target audience – the very people you want to engage with.

This approach allows you to establish thought leadership, demonstrate your expertise, and capture leads through opt-in forms or newsletter subscriptions. Consistently providing valuable content builds trust and credibility, ultimately driving your lead-generation efforts forward.

Let's not forget about the power of social media marketing. With platforms like Facebook, LinkedIn, Instagram, and Twitter, you have a direct line to your potential customers.

Engaging and shareable content, active participation in industry discussions, targeted ads, and the use of lead generation forms or landing pages can help you capture leads directly from these social media channels.

The robust targeting options offered by these platforms enable you to reach your desired audience effectively. It's a fantastic way to expand your reach and generate leads.

Webinars and events

Last but not least, consider hosting webinars or participating in industry events. These avenues provide excellent opportunities to attract leads who are genuinely interested in your topic or industry. Promote your events through various channels, gather registrations, and collect contact information from attendees.

It's an incredible opportunity to interact directly with your audience, answer their questions, and provide valuable insights. By hosting webinars or participating in industry events, you can establish yourself as a trusted authority and build strong connections with your potential customers.

How to create a lead generation strategy

Creating a lead generation strategy isn't a one-time thing. It's an ongoing process that requires you to stay on top of things, adapt to market trends, and optimize your tactics. You need to regularly assess your strategy, make adjustments when needed, and be flexible to maximize your lead generation success.

So, let's break it down. Here's how you can develop an awesome lead-generation strategy:

Developing a lead generation strategy

Next up, get to know your target audience and create buyer personas. Dive into some market research to understand who your ideal customers are - their demographics, interests, pain points, and behaviors.

This info will help you create fictional representations of your target customers, called buyer personas. Having these personas in mind will help you shape your messaging and tailor your lead-generation efforts.

Identifying target audience and buyer personas

Now, let's set some specific goals and objectives for your lead generation strategy. Be clear about what you want to achieve and make sure your goals are measurable.

Maybe you want to generate a certain number of leads each month, increase your lead conversion rates, or improve the quality of your leads. These objectives should align with your overall business goals and give you a clear direction for your lead-generation efforts.

Setting specific goals and objectives for lead generation

Next, you need to set some specific goals and objectives for your lead generation strategy. Be clear about what you want to achieve and make sure your goals are measurable.

Selecting appropriate channels and tactics

Now, it's time to choose the right tactics. Based on your target audience and goals, pick the lead generation tactics that make the most sense for you.

It could be content marketing, social media marketing, email marketing, SEO, paid advertising, webinars, events, or partnerships. Think about which tactics will effectively reach and engage your audience, and make sure they align with your overall strategy.

Creating compelling content and offers

Now, let's talk content. Creating compelling and relevant content is key to lead generation. You want to offer value and address your audience's pain points.

Think blog posts, e-books, videos, webinars, case studies, or infographics – whatever works for your audience. And don't forget to optimize your content for search engines and make it shareable across different platforms.

Implementing lead nurturing and follow up

Moving on, you need to have a plan for capturing leads and nurturing them through their buyer's journey. Use lead capture forms on your website, landing pages, or social media platforms to collect their contact info.

Set up marketing automation and lead nurturing campaigns to deliver personalized and timely content that guides leads toward making a purchase decision.

Tracking and analyzing results

Last but not least, keep an eye on your results. Track the performance of your lead generation efforts using analytics tools. Look at metrics like website traffic, conversion rates, email open and click-through rates, and lead-to-customer conversion rates.

This data will show you what's working and what needs improvement. Use it to make informed decisions and optimize your lead generation strategy accordingly.

Key metrics for measuring lead generation success

To assess the effectiveness of your lead generation efforts, it's important to track and analyze key metrics. These may include:

Conversion rate: Measure the percentage of leads that convert into customers or complete desired actions, such as downloading a resource or filling out a form.
Cost per lead (CPL): Calculate the average cost incurred to generate each lead. Divide the total lead generation costs by the number of leads generated within a specific time period.
Return on investment (ROI): Assess the overall effectiveness and profitability of your lead generation efforts by comparing the revenue generated against the costs invested in acquiring leads.
Lead quality: Evaluate the quality of leads based on criteria such as engagement level, potential for conversion, and alignment with your target audience and buyer personas.
Lead velocity: Track the speed at which leads move through the sales funnel, from initial contact to conversion. This metric helps identify bottlenecks or areas for improvement in your lead nurturing and sales processes.