What Is Lead Generation? Meaning and Strategies

What Is Lead Generation? Meaning and Strategies

Generating new customer leads is one of the most important tasks of a marketing team. Without quality leads, your business will not be able to generate revenue.

The key, however, is not just to bring in any lead but to bring in quality leads. Quality leads are those who have a genuine interest in your business and might potentially become paying customers. In this guide, we’ll explore how you can build an effective lead generation strategy.

In this article, we’ll define what a lead is, explore the different types of leads, and help you optimize your sales funnel to collect and convert more prospective customers.

What is a lead?

In business, a lead is a person or organization that is potentially interested in making a purchase from your company. Leads must work their way through something known as a sales funnel. A lead begins at the top of the sales funnel, which is where they’re aware of your company and the potential solutions it offers. From there, your business works on nurturing the lead to progress further down the sales funnel to (hopefully) make a purchase from you.

The better you understand your leads, including where they are in the sales funnel and what pain points they want to solve with your help, the easier you will find it to engage them and bring them in as a customer.

What is lead generation?

Lead generation is the process of attracting potential customers (leads) and convincing them to make a purchase. Depending upon your business and industry, this process can vary in how long it takes to convert a lead. An e-commerce site, for instance, might have a significantly faster lead generation process than someone who sells cars.

However, regardless of the length of the process, you’ll find that your customers will follow the same basic four-step process:

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  • Attract: At the top of the funnel, you’ll start by attracting potential customers. You attract them by demonstrating that you understand their pain point and can offer a potential solution.
  • Convert: Next, you need to convert this interested customer into a lead. To help convert a lead, you’ll need to secure some personal information like a name and email address. From there, you can send them personalized information that demonstrates how you can help solve their problem.
  • Close: During this next phase, you convince your lead that you are worthy of their investment. More specifically, you want to convince them that you offer greater benefits than your competitors.
  • Re-engage: You do not want to neglect this last step. Once a customer closes, you want to make sure you continue to provide them with outstanding customer service and help them get the most out of their purchase. When it comes time for them to buy again or tell others about their experiences, maintaining this relationship will provide you with immense value.

Why is lead generation important?

Lead generation is important for business growth. Those that do not actively look for new customers or re-engage repeat customers will find it hard to remain competitive. Lead generation is also incredibly important when it comes to building your brand. Whether your goal is to become an authority in your industry or a household name, maintaining a steady flow of leads is key in getting you there.

Outlining a lead generation strategy will greatly enhance your ability to catch more leads. In fact, 46% of marketers who have planned out their lead management strategies find that their sales team nurtures 75% more leads. Businesses need to be prepared to put in the work to build a successful lead generation funnel because it doesn’t happen overnight. Instead, it requires trial and error—like A/B testing your messaging—to determine which lead nurturing strategies consistently produce the most leads.

Benefits of developing a successful sales lead generation strategy include:

  • Maximize your resources: Instead of wasting funds and time on strategies that don’t generate success, you’ll be able to focus on techniques that work because they’re backed by data.
  • A steady stream of leads: With a well-defined funnel, your marketing and sales teams will have that many more leads to nurture and convert.
  • Improve demand generation: You will build your brand reach and reputation, which in turn continues to improve demand and interest in your business.

Types of leads: MQL vs. SQL

As you begin to bring in leads, you will quickly discover that you have two different types of leads: Marketing qualified leads (MQL) and sales qualified leads (SQL). Understanding these types of leads and when and how they need to be nurtured can help you better approach them and initiate conversions.

MQL (marketing qualified lead)

A marketing qualified lead (MQL) is someone who has begun to express some interest in your company, but they are not yet far enough along to make a purchase. Instead, the marketing team will engage with them a bit more to learn about their problem and how you can offer the best solution.

Other traits of an MQL include:

  • Typically defined as an MQL by your marketing team
  • Engaged with your company and likely already involved in some sort of lead nurturing workflow through your marketing strategy
  • Require more engagement before they are ready to make a purchase

SQL (sales qualified leads)

A sales qualified lead (SQL) is someone who has shown enough interest in your business that it is time for the sales team to make a direct sales push to convert them into a paying customer. If your business uses a lead scoring system to define your leads, an SQL will typically have one of the highest ratings.

Potential leads that make it to this stage in the sales pipeline will share common traits such as:

  • A high level of consistent engagement and interest with your company
  • Visit high-value pages, such as pricing pages
  • They have been sent follow up emails because there has been communication in one way or another

Most popular lead generation sources

There are several B2C and B2B lead generation sources that you can use to nurture business growth and find those interested in your company. Some of the most popular include:

Search engine optimization (SEO)

Search engine optimization (SEO) involves optimizing the valuable content you create and your website so that search engines rank it highly on the search engine results pages (SERPs) for the user queries and target keywords most relevant to your business.

Ranking highly on the SERPs encourages people interested in your content to click on it, bringing them to your website and offering you the chance to nurture them and encourage them to become a lead. When SEO is leveraged appropriately, you can achieve a conversion rate as high as 14.6%.

For example, let’s say you own a photography company in Orlando, Florida. You might want to target the keyword “Orlando graphic design” throughout your website and blog posts to attract local leads.

Content marketing

Content marketing calls for the regular production of high-value content that potential customers want to engage with. Use this popular inbound strategy by focusing on understanding customer needs and using various mediums to help them, such as videos, written text, images, and infographics.

Nearly three-quarters of marketers report that content marketing increases both the number of leads they bring in and the quality of the leads uncovered. One way to generate leads through content marketing is by offering gated content, such as checklists, templates, and even e-books. These lead magnets ask for user information in exchange for valuable information.

Direct mail

Direct mail marketing involves sending fliers and other mailed advertisements directly to the homes of potential customers. Local businesses may find this lead generation strategy especially helpful when targeting people in their area.

Around 40% of direct mail recipients report they at least scan the mail they receive, which means businesses using this strategy have the potential to get their name in front of an impressive number of people.

For example, direct mail might be an effective lead generation strategy for brick-and-mortar retail stores. They can entice potential customers to buy by sending them special offers or discounts in the mail.

Email marketing

Email marketing involves targeting people who’ve engaged with your business before by sending them helpful, relevant content they’re likely to appreciate. You can build an email list in various places, from sign-ups in your store or at events to your website. Email can also be coupled with strategies like automation to help you reach out to customers whenever they engage in a particular action on your website, such as leaving items in their online shopping cart.

Around 47% of marketers say that email campaigns are their most effective channel.

Social media

Social media includes everything from Pinterest to LinkedIn and usually involves having users take certain actions, such as swiping up on Instagram stories or clicking certain links on Facebook. Businesses might also want to create ads tailored to their target audience. Another example of using social media to generate new leads includes actively engaging with potential customers. This might include hosting virtual events or conferences or sharing testimonials from happy customers.  

Two-thirds of marketers report generating leads through social media when spending only six hours a week on this strategy, making it an excellent investment.

Paid search (SEM)

Paid search or search engine marketing (SEM) is when businesses purchase ads within the sponsored section of search engine rank pages (SERPs) and pay each time the ad is clicked (aka pay per click or PPC). These types of ads can also be displayed within websites—either via pop ups or retargeting ads. Nearly 79 percent of marketers report that paid search benefits their business, meaning it's a strategy worth considering.

So, what does this strategy look like in action? If you Google “how to start a website,” you’ll see “Ad” next to the top hits. These are paid search results.

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Promotion marketing (coupons and discounts)

Another popular lead generation tool, promotion marketing, refers to offering deals and discounts that will entice new customers to give your business a try. For example, a graphic designer might offer a free consultation to someone looking for a complete rebranding.

Over 90 percent of consumers report that they have used a coupon before, and nearly as many reported that price is one of the main factors they consider when preparing to make a purchase. Incentives can be an excellent way to draw in customers.

Trade shows

A trade show is an event where you get together with others in the industry and showcase what you have to offer your customers. Typically, you promote your product or service through demonstrations and having salespeople talk to potential customers to encourage them to learn more about your product or service. For example, if you’re a marketing agency, you might attend a trade show geared toward a specific industry you’re trying to tap into.

At trade shows, 46 percent of the attendees are upper-level managers or executives, which means that you get to demonstrate your worth directly in front of those decision makers that likely have a large impact on the business budget.


Thanks to streaming channels and all of the new ways that customers can engage with their television, you now have a variety of ways to advertise for your consumers beyond traditional commercials. Although you can still create ads that run during T.V. shows, you also have the opportunity to sponsor shows in exchange for them showcasing your product or service. For instance, think of the times when announcers read, “This show is brought to you by…”

In the United States, television is ranked as the second most profitable advertising strategy. When you can target viewers effectively, this strategy can benefit you tremendously.

Client referrals

Client referrals are exactly what they sound like: they are leads that come from current or previous clients that liked working with you. For instance, if you’re a website design firm and are referred to another company through one of your clients, this is called a referral. Clients that come to you through referrals have a 37%higher retention rate themselves, which is important for the long-term growth of your business.

Examples of how to generate leads for your business

So, what do all of these strategies look like in action when you’re trying to reach your target audience? Below, we’ll look at a few scenarios on how to make these lead gen techniques work for your business.

Niche communities: Targeting specific customers

Typically, the more niche you can get with a lead, the easier it is to convert. The better you understand your lead, the more you have a solid grasp on their reasons for hesitation when making a purchase, their main motivations, and what they want to see before making a purchase. This, in turn, allows you to create highly targeted materials to convert them.

To put this strategy to use, you’ll want to:

  • Combine your market research with existing customer data to learn more about what inspires specific customers to buy from you.
  • Create personalized sales scripts that speak to the needs of these customers.
  • Track every part of the funnel to help you understand how to improve your strategy moving forward.

For example, let’s say you’re a marketing agency. If you’re looking to add more clients from the financial services industry, you’ll want to seek out these specific niche communities to learn how to create a lead strategy that converts. This could mean visiting financial blogs or downloading some of the more popular financial apps to see what people want.

Content marketing: Gated blogs, webinars, case studies, whitepapers, and quality research

With content marketing, you can create a variety of gated items that require people to provide their contact information to access them. With this information, you’re able to add them to a highly targeted workflow that will hopefully lead to a conversion.

In practice, this entails:

  • Building high-quality content that people will want to download.
  • Promoting the content through SEO and social media so that the right audience finds it.
  • Collecting contact information so that you can maintain contact with these prospects.
  • Analyzing your content marketing results so that you see the type of gated items and the topics that customers appreciate the most

As we continue with the marketing agency example, consider producing some original research that reveals how you hit a particularly impressive milestone like, “X Strategies that Got Our Agency 500 Leads in Less Than 30 Days.” There’s a clear value proposition, which means you’re more likely to gain contact information from qualified leads.

Email marketing: Call to actions with dedicated landing pages

Email marketing works best when you have a call to action on dedicated landing pages. You want customers to see your website and decide that you have the information they want and that they want to receive more of it in their inbox. Landing pages with appropriate CTAs allow you to create highly targeted email lists.

When outlining an email marketing strategy, consider the following:

  • Start by deciding what media products you want to offer, such as a newsletter or exclusive discounts and offers.
  • Create a dedicated landing page for people to register for your special offers.
  • Group people in your email marketing platform based on a lead scoring system (i.e., if someone has visited your website multiple times, they’ll have a higher score and be a much more qualified lead than someone who hasn’t).

Using our marketer example, this could also be another feature on a gated landing page. The CTA could ask a visitor to enter their email address to get whatever you are advertising. With this email address, they are added to an email marketing workflow.

Host online or in-person events: Conferences, workshops, or local meet-ups.

In-person or online events offer you a great opportunity to showcase your expertise and authority in the industry. You can use the event to educate others about the industry and the solutions that your brand offers.

To host a successful event, consider:

  • Creating an event theme based on the recent interests of your target audience
  • Promoting your event across all of your marketing channels
  • Offering opportunities at the event for people to get personal interactions with your team to learn more about buying your product or service
  • Providing attendees with chances to register for email lists for continued nurturing

Continuing with the marketer example, you could host an online workshop on creating an effective email marketing strategy. You can provide an added benefit to your attendees by sending them the recorded workshop.

Affiliate and referral systems

Affiliate marketing and referral marketing allow you to tap into your powerful network so that you can leverage other people and have them find high-quality leads for you. For example, you might hire affiliates to help you find leads by promoting your products and services on their own sites.

Similarly, referral systems encourage your customers to get their friends and family to buy from you, too. You can offer people rewards, such as special discounts, for referring people who successfully convert into paying customers.

To take into these programs, you’ll want to work through the process by:

  • Identifying your target audience and the type of affiliates that might reach them
  • Creating a referral program that offers rewards your customers will likely appreciate
  • Incentivizing people to generate leads by offering unique bonuses for the leads that become customers

Coming full circle with our marketer example, you can offer referrals a 10 percent discount on future work if you close on a client they sent you.

Optimizing your landing pages for lead capture

Once you get website visitors interested in your product or service, you need to ensure you have landing pages that are designed to convert. We’ll walk you through the core parts of a landing page so that you can design one that will entice people to convert.

1. Have a clear call to action

You want to make sure that people know what to do when they land on your page. A call to action (CTA) lets them know what you want them to do. If they don’t know what to click or what you want them to do, you’ll lose the prospective lead.

2. Limit the number of actions on a page

It can be tempting to think that providing customers with multiple choices of actions to take will increase the odds of them completing at least one. However, the opposite is actually true. Sites that have only one clear CTA outperform those that have two or more. Too many choices can cause confusion and result in more people leaving the pages without converting.

On our “Future Workforce Report” landing page, for example, there’s one clear CTA to “Get the report.”

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3. Only capture important information

Customers understand that they need to turn over some contact information to receive more information from your company. Still, if they think that the business is asking for too much information, they’ll sooner leave before turning it over. In their minds, the “cost” of your item just became too high. In fact, landing pages that ask for more personal information, such as gender, have some of the worst conversion rates.

For instance, consider the form below that is a CTA for blog subscribers. It only asks for two pieces of information: The potential leads name and their email address.

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4. Make sure the landing page is mobile friendly

Customers today use their mobile devices for just about everything, from shopping to chatting with friends. Therefore, pages that load too slowly on mobile devices can be detrimental to your customer relationship and encourage people to leave a page. Put your best foot forward and create a good impression with customers by making sure the page is mobile friendly.

5. Clear and concise value proposition

You want to let customers know why you deserve their money and how you will fix their problems without overwhelming them. Pages built for conciseness tend to convert better than those with too many words.

6. Use proper lead tracking and analysis

Lead tracking and analysis can help you better see how a particular lead interacts with your site and specific landing pages before they convert. Without proper tracking and analysis, you won’t be able to identify which tactics are most effective.

How to score the quality of your leads

As you build your lead generation strategy, you will find that the leads that come in can vary significantly in their level of interest. Lead scoring is one way to help you identify which leads are more likely to convert versus those that might need a little more nurturing. You can create a scoring system based on key performance metrics or KPIs. A simple system can range from 1 to 100, where the higher numbers indicate a lead that is lower in the sales funnel and has a high likelihood of conversion.

Let’s explore some important KPIs that you will likely encounter when tracking data for your lead generation strategy and how to use them to qualify for leads

Click-through rate (CTR)

Your CTR is a data point that tells you how many people clicked through your page or ad. A landing page that has a high CTR means it’s very interesting to your customers and, therefore, might be a good page to put in front of leads you’re trying to nurture. For instance, say you released a new whitepaper on best practices within your industry and have seen a high amount of sign-ups. This is something that might be effective in nurturing leads that are higher in the sales funnel.

Time to conversion

The time to conversion metric will help you see how long it takes people to move from their first interaction with your brand to converting. Tracking how long it takes someone to go from the initial stages of the process to actually converting can help you determine the value of that lead from the start. For instance, a lead that visits your site once and signs up for multiple items (e.g., a whitepaper or to be included on an email list) would receive a higher score than someone who signed up for one thing.

Conversion rate (CR)

Your conversion rate looks at the number of people who fulfill a particular conversion request. Depending upon the offer on the page, the conversion rate can help you understand the quality of your leads. A conversion on a landing page promising general information will tell you less than a conversion on a page discussing competitor comparisons.

For example, a high conversion rate on a page offering a free website audit would let you know these leads should be scored high because they’re ready to discuss their issues with a professional.

Cost per click (CPC)

The cost per click (CPC) is the amount you end up paying each time someone clicks on your paid ad. The platform hosting the ad will look at what you are willing to pay per click, how that compares to others, and the quality of your ad itself to determine when the ad should be displayed.

A high cost per click indicates that the audience you want to target with this ad—either the demographics on social media platforms or a particular query on search engines—is popular. If you have a CPC of $1.00, then you know this is a fairly competitive search parameter, and the leads you obtain will likely be moving quickly through the sales funnel.

Cost of acquisition (COA)

The cost of acquisition measures the amount of money the business spent throughout the process to finally convert a new lead. For example, if you spent $1,000 on a marketing campaign that brought in 20 leads, and ten of those 20 became customers, then you spent about $100 per new customer.

As your lead generation funnel improves, you will find that your cost per lead stays low. Keeping a lower cost per lead also helps to indicate that you are bringing in good quality leads. If you were spending disproportionate amounts of money on each lead and only a few converting, then it would indicate you spend too much time with poor leads that would not become customers.

Return on investment (ROI)

Your return on investment looks at the amount of money you spent on a given campaign and how much you get back in terms of revenue. A high ROI indicates that the leads you find are interested in your brand and end up making substantial purchases from your company.

If you find that your lead generation campaigns deliver you $5 for every $2 you spend, then you know you have brought in some highly qualified leads.

Lifetime value (LTV)

The lifetime value of a customer describes the amount of money that they will spend with your business throughout their lifetime. For example, suppose you sell cars, and you have a customer who regularly returns every 7-12 years to trade in an old car. In that case, that customer has a higher lifetime value than one who buys only one item from a business and never returns. If the average lifetime value of your leads increases, you can see the high value of your leads.

If you have a high lifetime value of your customers, that indicates you have found quality leads. These leads must have a genuine interest in your business.


Lead generation comprises a critical part of building a business, from startups to established organizations. As you think about where you can improve your lead generation strategy, look at the examples above to figure out where to make some adjustments. And if this is your first time figuring out how to implement some lead generation efforts, consider hiring a lead generation specialist to get started.


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What Is Lead Generation? Meaning and Strategies
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