Think back to your last online purchase. Before you clicked the checkout button, you likely explored various products, searched for reputable shops, revisited your top choices, and even signed up for marketing emails to secure a discount.
Your actions signaled your needs. A business that understands your needs at each stage of the buyer journey can encourage you to convert—a process known as lead generation.
Here’s how lead generation works, why it matters, and five lead-generation strategies you can use to drive business growth.
What is lead generation?
Lead generation (or lead gen) involves identifying potential customers and capturing their interest with content to encourage their progress down the sales funnel. Adopting a lead-generation strategy helps you cultivate customers through to purchase. The goal is to increase consumer interest, build loyalty, and boost sales.
Types of leads
Not all leads are the same. In fact, one of the benefits of generating leads is that it lets you classify or qualify leads based on the level of interest. Once a lead is qualified, you can take specific actions to move it down your sales funnel and encourage conversion.
Here are the various types of leads, and the criteria businesses use to qualify them:
Cold leads
Cold leads haven’t yet expressed interest in your company—they’re only considered leads because you’ve identified them as potential targets for your products or services. Cold leads are also known as outbound leads because you must initiate contact with these potential customers first.
For example, a company that sells custom packaging products to small ecommerce businesses might use a professional networking site like LinkedIn to identify suitable business owners. From there it can pull information including names, company name, role, and contact information.
Marketing-qualified leads
Marketing-qualified leads have completed an action (or series of actions) showing interest in your product or service, but aren’t ready to become a paying customer. They’re also sometimes called warm leads.
Marketing-qualified leads may have visited your website or a landing page, filled out a contact form, or signed up for a marketing newsletter. Businesses typically give these leads marketing materials designed to encourage further engagement with the company.
Sales-qualified leads
Sales-qualified leads (or sales-ready leads) have taken an action that indicates a desire to purchase, such as inquiring about a specific product or requesting a sales call. Once a lead is sales-ready, your company’s marketing team typically transfers them to your sales team to continue the nurturing process.
Product-qualified leads
Product-qualified leads (or service-qualified leads) are a specific type of sales lead. These customers have used your product and want to buy. Product-qualified leads are most common for companies that offer free trials or tiered pricing plans that include a free version.
Lead generation process
You can divide your lead-generation efforts into four stages: research and strategy, lead capture, lead qualification, and lead nurturing. Here’s a quick overview of the process:
Research and strategy
The first step in lead-generation marketing is researching the interests, needs, shopping habits, and media consumption preferences of your potential leads. Use this information to develop your strategy by selecting lead-generation tactics that are likely to reach your target customers.
For example, an apparel company targeting women between ages 25 and 35 might develop leads on social media platforms like Instagram and TikTok, while a business-to-business (B2B) company might engage in outbound tactics like cold calling or running Linkedin ads.
Lead capture
Once you’ve developed your lead-gen strategy, you’re ready to start generating high-quality leads. This can involve conducting outbound research or launching a campaign (such as a social media marketing campaign or an email marketing campaign). The goal of which is to drive prospects to landing pages that contain website forms designed to capture lead information.
The step is known as lead capture because it involves gathering or capturing information like names, email addresses, and job titles that lets you serve leads relevant content.
Lead qualification
Evaluating a new lead’s interest in your company is called lead qualification or lead scoring. It can help you assess lead quality, determine where a customer is in their journey, and identify actions you can take to encourage conversion.
Sales and marketing teams often create lead-scoring systems that allocate points to leads based on key demographic criteria and behaviors showing interest in your company.
For example, you might award a lead with five points for being in your target age range, 10 points for living in your targeted geographic region, 15 points for visiting your website, and 20 points for signing up for marketing emails.
Lead nurture
Once you’ve determined where a potential customer is in their journey, take targeted actions to encourage further engagement—known as nurturing leads.
For example, customers who are ready to convert might receive a specific offer, and those in the research phase might get information about your product or service.
Lead generation strategies
Your lead-generation strategy refers to how you capture and nurture leads. Here are five different lead-generation strategies to consider:
Content marketing
Content marketing relies on creating and distributing content to your target audience, reaching new customers, retaining existing customers, and, ultimately, boosting sales. Content marketing is an ideal fit for many lead-generation campaigns.
Content marketing often complements search engine optimization (SEO) efforts to increase your site’s visibility in search engine results. For example, an apparel company might create a series of blog posts that incorporate trending searches like “colorful spring rain boots” or “best transitional jackets” to draw relevant traffic to its website.
Social media marketing
Social media marketing campaigns are another popular online lead-generation strategy. You can select social media platforms popular with your target audiences and publish organic content (authentic user-generated material) or run paid social media ads.
Most platforms let you include links to external landing pages—sometimes for an additional fee. Others allow you to use built-in lead capture forms to collect contact information and other relevant details, like company and job title. Social media marketing, similar to content marketing, can support lead capture and lead nurture activities.
Online advertising
Online advertising helps you get your content in front of new customers, making it an effective way to attract new leads. You can advertise on social media platforms or purchase ads through an ad vendor or network. You can also use a search engine marketing strategy (also known as paid search) to increase your search engine visibility.
Referral marketing
Referral marketing is a top-of-funnel marketing strategy that encourages existing customers to refer new customers to your business, often through rewards. Start a referral marketing program to generate new leads and encourage your most loyal customers to become active brand ambassadors.
Outbound marketing
Content marketing, social media marketing, online advertising, and referral marketing are all examples of inbound lead-generation strategies, meaning that they use inbound marketing techniques to encourage prospective leads to initiate contact with your business.
You can also use outbound marketing techniques like cold emailing, cold calling, and attending trade shows or industry events to generate leads. These techniques are particularly popular for B2B lead generation because B2B businesses frequently have fewer total customers and a higher average order value, making time-consuming and expensive outbound marketing strategies more likely to pay off.
Lead generation FAQ
How do you improve lead quality?
These tips can help you generate high-quality leads:
- Conduct audience research and develop buyer personas.
- Tailor content to your ideal customers.
- Select tactics and platforms popular with your target audiences.
- Ensure that contact forms capture the information you need to evaluate leads.
What are creative lead-generation ideas?
- Host an event.
- Develop interactive content like games or quizzes.
- Start a referral marketing program.
- Create templates or how-to guides for your target audiences.
- Offer product trials or giveaways.
What are the four steps of the lead-generation process?
There are four steps to generating leads:
1. Develop a strategy.
2. Capture leads.
3. Lead qualification.
4. Lead nurturing.
What are lead-generation tools?
Lead-generation or lead-management software tools are applications designed to support the lead-generation process. They can help businesses manage lead interactions and track a lead’s progress through the sales funnel.
