What is Lead Generation? Beginner’s Guide for 2024 (2024)

What is a lead?

Leads are potential customers who’ve shown interest in a company’s product or service.

This interest is often indicated by providing contact data, such as an email address, phone number, or other relevant details. When leads enter the sales funnel, it’s sales and marketing’s job to nurture them and convert them into paying customers.

There are four different types of leads; what differentiates them is their level of interest and engagement.

1. Marketing Qualified Lead (MQL)

This is a lead who has shown interest through marketing efforts, such as downloading a whitepaper, attending a webinar, or filling out a contact form.

MQLs are deemed more likely to become customers than general contacts.

2. Sales Qualified Lead (SQL)

This is a lead that sales has vetted and considers ready for direct sales engagement.

SQLs typically show a stronger intent to purchase and often fit the criteria of an ideal customer.

3. Product Qualified Lead (PQL)

This is a lead that has used a product as part of a free trial or a freemium version.

PQLs typically behave in a way that indicates a readiness to convert to a paying customer. These behaviours include frequent usage or engaging with premium features.

4. Service Qualified Lead

This is a lead that has indicated interest in a company’s service offerings, often through initial consultations or requests for more information.

What are the types of lead generation?

Lead generation encompasses numerous methods for attracting and converting potential customers.

Here are some common types of lead generation:

Inbound lead generation

This strategy uses valuable content and experiences to attract target customers to your business.

Unlike outbound methods, which actively reach out to prospects, inbound lead generation draws people in by providing helpful, relevant information that addresses their problems and questions.

Here are some inbound examples:

• Content marketing: Creating and sharing valuable content (blogs, eBooks, whitepapers, videos) to attract potential leads.
• SEO (Search Engine Optimisation): Optimising website content to rank higher in search engine results, thereby attracting organic traffic.
• Social media marketing: Using social networks to engage with potential leads through posts, ads, and interactions.
• Email marketing: Sending targeted emails to nurture leads and collecting email addresses through sign-ups.
• Webinars and online events: Hosting informative sessions to engage with potential leads and collect their contact information.

Outbound lead generation

This strategy involves reaching out directly to potential customers, with the goal of generating interest in your product or service.

Unlike inbound methods, which attract leads by offering valuable content, outbound lead generation focuses on initiating contact with prospects who may not have previously expressed interest.

Here are some outbound examples:

• Cold calling: Directly contacting potential leads via the phone to pitch products or services.
• Direct mail: Sending physical mail, such as brochures or postcards, to potential leads.
• Cold emailing: Sending unsolicited emails to potential leads.
• Advertising: Launching paid ads on search engines, social media, or other platforms to reach potential leads.

B2B (Business-to-Business) lead generation

The process of identifying and attracting a business to buy products and services offered by another.

Unlike B2C (business-to-consumer) lead generation, which targets individual consumers, B2B lead generation focuses on companies, organisations, or professionals as the target audience.

Here are some B2B examples:

• LinkedIn marketing: Leveraging B2B’s number one social platform, LinkedIn, for networking, ads, and direct outreach to other businesses.
• Industry events and trade shows: Participating in events to connect with potential business clients.
• Account-Based Marketing (ABM): Targeting specific companies with personalised marketing efforts.

Online lead generation

This approach leverages online tactics and tools to reach and engage with prospective customers.

Online lead generation offers the advantage of reaching a wide audience while providing measurable results and opportunities for continuous improvement.

Here are some online examples:

• Landing pages: Creating dedicated pages that are optimised for capturing lead information.
• Lead magnets: Offering free resources (eBooks, templates, checklists) in exchange for contact details.
• Chatbots and live chat: Using automated or live chat services on websites to engage visitors and collect their information.

Offline lead generation

This approach relies on traditional marketing and networking tactics to reach and engage with acustomer base.

Offline lead generation offers the advantage of building personal relationships and trust, as well as reaching audiences who may not be active online.

However, it usually requires more resources and time compared to online lead generation.

Here are some offline examples:

• Networking events: Attending industry-specific events to meet potential leads.
• Workshops and seminars: Hosting educational sessions to attract and engage potential leads.
• Community involvement: Participating in local events and sponsorships to build brand awareness and generate leads.

Hybrid lead generation

This strategy combines online and offline lead generation to attract and capture potential customers.

By integrating online and offline channels, businesses can effectively engage with prospects across different touchpoints. This increases their chances of capturing high-quality leads.

Here are some hybrid examples:

• Webinars with follow-up calls: Running online webinars followed by direct calls to attendees.
• Online ads with offline events: Using online ads to promote offline events and collect leads.

Why is lead generation important?

Lead generation is vital for any business’s growth. By focusing on generating high-quality leads, you provide sales teams with a contact base of consumers that match your ideal customer profile. This, in turn, increases revenue from conversions.

And even if your leads aren’t ready to buy your product when they first learn about it, you can nurture them through the B2B marketing funnel until they eventually become sales-qualified leads.

What is the lead generation process?

We know it’s complex!

First off, lead generation costs money. You have to factor in the costs involved in creating content or campaigns to generate leads.

Secondly, it takes time to pay off. How much you spend and what return on investment you’ll see depends on the lead generation strategies and channels you choose.

To cut a long story short:

Lead gen works best when you create an omnichannel lead generation strategy that targets the right audience with the right messaging. It allows customers to engage with your company in ways that work for them.

The lead generation process involves several steps to attract, capture, and convert potential customers.

Here’s an overview of a typical lead generation process:

1. Identify your target audience

Start by conducting research to understand your target audience’s needs, preferences, and challenges.

Then develop detailed profiles of your ideal customers. Include elements like demographics, technographics, interests, pain points, and buying behaviours.

Tip! Find out how to find free leads for your business.

2. Attract online visitors

In this step, you must create and distribute content that addresses your audience’s needs and interests.

Try a mix of content marketing (blogs, videos, podcasts, eBooks), SEO, social media and pay-per-click.

3. Capture your leads

Follow these online strategies for capturing demand:

• Create dedicated landing pages for specific campaigns. Include clear and compelling calls-to-action (CTAs).
• Use forms on your landing pages, website, and blog to collect contact information from visitors.
• Offer valuable resources (also called lead magnets) in exchange for contact details. Examples are eBooks, whitepapers, webinars and free trials.
• Implement pop-ups and slide-ins on your website to capture lead generation data.

4. Qualify your leads

Lead qualification is a crucial step in the lead gen process. Here, you have to work out if the prospect is right for your company.

There are several ways of qualifying leads:

Ask qualifying questions

The best qualification questions to ask your leads are:

1. What challenges/pain points are you/your team experiencing?
2. How urgently do you need to solve these challenges?
3. What solutions/vendors are you/your team using?
4. Who is involved in the decision-making process and what steps do they follow?
5. What budget/financial constraints are you/your team currently working under?

Use qualifying frameworks

Here are some ways of qualifying sales leads:

BANT (Budget, Authority, Need, Timing):

1. Budget: Does the lead have the financial resources to purchase your product or service?
2. Authority: Does the lead have decision-making power? If not, are they an influencer in the purchasing process?
3. Need: Does the lead genuinely need your product or service? Can it effectively solve their problem?
4. Timing: Is the lead ready to make a purchase within a reasonable timeframe?

CHAMP (Challenges, Authority, Money, Prioritisation):

1. Challenges: What specific challenges/pain points does the lead face?
2. Authority: Does the lead have the authority to make purchasing decisions?
3. Money: Does the lead have the budget for your product or service?
4. Prioritisation: Is solving the identified challenges a priority for the lead?

MEDDIC (Metrics, Economic Buyer, Decision Criteria, Decision Process, Identify Pain, Champion):

1. Metrics: What potential impact will your solution have on the lead’s business?
2. Economic buyer: Who has the ultimate purchasing power?
3. Decision criteria: What criteria does the lead use to make purchasing decisions?
4. Decision process: What is the lead’s decision-making process? Who are the key stakeholders in that process?
5. Identify pain: What are the lead’s pain points and challenges?
6. Champion: Who in the lead’s organisation can be an advocate for your solution?

GPCTBA/C&I (Goals, Plans, Challenges, Timeline, Budget, Authority/Negative Consequences & Positive Implications):

1. Goals: What are the lead’s goals and objectives?
2. Plans: What are the lead’s current plans for achieving those goals?
3. Challenges: What obstacles exist that prevent the lead from achieving their goals?
4. Timeline: What is the lead’s timeline for addressing their challenges?
5. Budget: Does the lead have the financial capacity to invest in your solution?
6. Authority: Who are the decision-makers involved in the purchasing process?
7. Negative consequences: What are the negative consequences of not addressing the lead’s challenges?
8. Positive implications: What are the positive outcomes of solving the lead’s challenges?

Score your leads

This is a process where you assign scores to your leads based on their behaviour, engagement, and fit with your ideal customer profile.

There are several lead scoring methods:

1. Demographic scoring: Assign points based on demographic information, such as job title, industry and company size.
2. Behavioural scoring: Score leads based on their behaviour, such as website visits, email opens, content downloads, and event attendance.
3. Engagement scoring: Measure the lead’s level of engagement with your brand across various channels.
4. Fit scoring: Evaluate how well the lead fits your ideal customer profile (ICP).

5. Nurture your leads

This step is all about growing relationships with your leads. You must engage and educate them about your product, as well as continually assess their readiness to buy.

Follow these lead nurturing strategies:

• Send personalised and relevant emails to engage and educate leads over time.
• Set up automated email sequences to guide leads through the sales funnel (this is also known as drip email marketing).
• Provide additional valuable content and resources to keep leads engaged and interested.
• Continue to engage with leads on social media by sharing relevant content and responding to their interactions.

6. Handoff to sales

In this step in the process, marketing transfers qualified leads to the sales team, including all relevant information.

Then, sales representatives follow up with the leads, with the aim of moving them further down the sales funnel.

For this step to work, your sales and marketing teams must be aligned on the lead generation process, especially the qualification criteria.

7. Convert your leads

This is what you’ve been waiting for - the conversion stage!

To effectively convert leads, follow this sales process:

• Use personalised outreach (calls, emails, meetings) to address leads’ specific needs and concerns.
• Offer product demos or free trials that showcase your solution’s value and benefits.
• Present proposals and negotiate terms to convert leads into paying customers.

8. Analyse and optimise

In this step, you must track lead generation KPIs such as conversion rates, lead quality, and ROI.

It’s a good idea to A/B test different elements of your lead generation process (CTAs, landing pages, email content). That way, you’ll identify what works best.

You should also collect feedback from leads and customers. This can help you improve your lead generation strategies and processes.

Use the data (and the insights you gain from it!) to refine and optimise your lead generation efforts.

9. Retention and upsell

Lead generation doesn’t end when leads become loyal customers!

To start with, you must provide an excellent onboarding experience. This ensures that new clients succeed with your product or service.

Make the buying journey smoother by engaging with your customers. Newsletters, product updates and personalised offers are all worth a try.

Finally, don’t neglect upselling and cross-selling! Always be on the lookout to upsell and cross-sell products or services to your existing customers.

10. Invest in lead generation tools

Sales intelligence tools (like Cognism!) allow you to get relevant, accurate customer information in bulk. They pull in data about leads from various sources, educating you about them before you contact them.

Kinaxis, the leading supply chain management software firm, used Cognism to obtain 5.7% of its MQLs - a rate that far outstripped other data vendors.

Barbara Collins, Marketing Database Manager at Kinaxis, said: