What is Lead Generation? A Beginner's Guide to Generating and Nurturing Leads


Lead generation is the process of gaining the interest of potential customers in order to increase future sales. It is a crucial part of the sales process of many companies.

A lead is anyone who has shown interest in a company’s products or services but may not yet be qualified to buy. They are potential customers with whom a company has not yet done business, but who have given reason to believe they may want to in the future.

What is a lead?

A person who expresses some interest in a company’s products and services is considered a lead for that company. Sales lead generation is the process of making people aware of a company and its products and services to spark interest in them. And sales lead generators are the tools used to find potential customers.

Leads fall early in a typical purchasing cycle, and they may transition from a visitor to a paying customer. Nurturing leads is essential, and while lead generation feels very similar to sales in many ways, it is a distinct function and deserves attention as such.


The evolution of lead generation

Lead generation used to involve purchasing lists of names and sales representatives cold calling people at home, but modern advances in technology have made it possible for us to now generate leads based on specific criteria and information. Companies collect information about potential buyers and then tailor marketing methods and sales pitches to the prospects’ needs.

This is largely done through digital channels, using inbound marketing techniques alongside some of the former outbound marketing methods (more on that below). Successful lead generation can make the sales cycle more efficient, and lead to greater success rates in new customer acquisition.

The importance of sales lead generation

The best-case scenario for closing a sale is when a lead finds out about your brand on their own and becomes a paying customer without your intervention. The worst-case scenario is when you reach out to a person who has no need or desire to buy your products or services and continues to receive your marketing and sales messaging. The best-case scenario is rare, and the worst-case scenario is highly undesirable. Sales lead generation falls somewhere between the two, helping you find willing customers who are but a nudge away from making a purchase. Lead generation offers the following benefits:

1. Target the correct customers: Sales lead generation is usually used to find prospects who have already expressed interest in the company’s products and services. This allows the company to focus all further marketing and sales efforts on prospects that exhibit a probability over the chance of actually paying for the product and/or service. 

2. Increase brand awareness: Sales lead generation can help increase brand awareness. Leads express interest in your brand, and by engaging this interest of theirs, you help them learn more about your brand, its values, products and services, and its features and benefits.

3. Data collection: Sales lead generation is also an excellent opportunity for you to collect data about your prospects. You can collect data about how they became aware of your company and your products and services, what marketing methods are generating more leads than others, what forms of communication engage the lead the best, what your leads’ needs and wants are, etc. Collecting this treasure trove of data will help you tailor your marketing and communication strategies and your products and/or services to meet your customers’ needs well.

4. Brand loyalty: By generating and nurturing leads, companies can build large communities of like-minded individuals interested in the company’s products and services. The building of this community fosters brand loyalty for years to come.

Lead generation in the digital age

The buying journey has changed dramatically with the growth of the internet and the increased availability of information.

  • In the past it was common practice for sales representatives to reach out to uneducated potential buyers in order to introduce them to their products and services.
  • Today customers have an abundance of information at their fingertips. They can use search engines, social media, blogs, and other online channels to research and become experts about a product before ever communicating directly with a representative of the company. The sales cycle will continue to evolve thanks to new and upcoming technologies.

This vast quantity of information also means that customers are no longer as interested in listening to a traditional sales pitch that doesn’t relate directly to their needs and it might even push them away. It is now important for companies to focus on generating new leads by developing a strong internet presence. This is often accomplished using inbound marketing methods that employ techniques like search engine optimisation and content marketing.

The digital age has also made it easier for companies to research and understand their perspective leads. By understanding the wants and needs of their target customers, companies can tailor information to better draw them in, as well as qualify any potential leads based on a variety of factors, such as engagement and demographic information. It is increasingly important for companies to not only generate new leads but also develop and nurture relationships with them.

Sales lead generation versus sales prospecting

The terms “lead generation” and “sales prospecting” are often used interchangeably, and while that’s understandable—they both try and change a customer’s ‘maybe’ to a ‘yes’—it’s not exactly accurate. While lead generation and sales prospecting do indeed share the same goal and exhibit some common features, there are some distinct differences between the two:

1. Sales lead generation is usually the responsibility of marketing departments, whereas sales teams commonly handle prospecting. 

2. Leads are people or companies that have expressed interest in your products and services, identified by performing a predefined action such as taking your survey, visiting your website, or subscribing to your newsletter. Prospects are people (or leads) the sales team has qualified as having a high potential to become customers. 

3. Sales lead generation refers to all the activities involved in actually acquiring a lead, whereas prospecting is the action of identifying potential clients and nurturing them towards becoming customers.

4. Sales lead generation is often an automated process, whereas prospecting primarily tends to be manual.

Lead quality vs lead quantity

Marketing departments often try to generate as many leads as they can. This focus on lead quantity seems logical in the face of things—the more leads you generate, the more leads you are likely to convert into paying customers. However, sales lead generation is a resource-, time- and money-intensive process, which is why sales departments tend to focus more on the quality of leads. A quality lead is a person with a clear need for your product and/or service, the intent to buy it, and the means to pay for it. Different companies might define more parameters to classify a lead as high-quality, but these three parameters are almost universal. 

Focusing on quality leads will allow a company to dramatically increase its conversion rate of leads to customers. A higher conversion rate will give your company the confidence to invest more time, money, and resources in lead generation, which in turn will help generate and convert more leads, and so on. 

Focusing on quality leads will also help you increase your return on investment in lead generation over the long term and achieve economies of scale faster. Quality leads will convert into customers quicker, helping you build a large customer base in a shorter period. Building a customer base will quickly help you expand and free up resources to target new customers and retarget existing ones.

Investing in quality leads can also have some drawbacks, however. Too much focus on generating quality leads can cause a sales team to overlook other essential duties, such as following up with existing customers. Moreover, all sales lead generation, whether focused on the quantity or quality of leads, is risky to some extent. Even quality leads can back out at the last moment, leading to a loss not only of a potential customer but also of all the time, resources, and money that were invested in trying to convert them up until that point in time.

What is a “qualified” lead?

Once a lead has been generated, it needs to be qualified. Whereas a lead is a person or company that has implicitly indicated an interest in your products and services, a qualified lead has expressly shown interest in becoming a paying customer. A lead is usually qualified by collecting more information about them. For instance, a website visitor shares contact information to receive updates about your products and services, thus becoming a qualified lead. As you collect more information about your leads, you can better classify them as qualified or unqualified. Focusing on qualified leads as sales targets will increase your conversion rate and improve your return on investment in sales activities. Here’s how you can qualify your leads:

1. Gauging your leads’ levels of interest: Gauging your leads’ interest levels in your products and services is the first step in qualifying leads. To gauge a lead’s level of interest, you need to collect more information about them. A lead willing to share personal and contact information with you will likely be interested in your products and services. The amount of information you need to collect to qualify a lead varies from company to company. An educational institution offering degree programs might need to collect much more information about their leads—educational background, financial situation, etc.—than a company selling bags and wallets. 

2. Lead scoring: Lead scoring involves assigning numerical values (or weights) to leads, based on several factors, to classify them on a scale ranging from “interested” to “ready to buy”. The characteristics and weights will, once again, vary from company to company, but they must stay the same across sales and marketing teams within the organisation. 

Some factors companies can use to assign leads scores are the amount of information they’ve given, the actions they’ve taken, how much they’ve engaged with your brand or anything else that your sales teams deem of relevance to closing a sale. The higher a lead scores, the closer they are to becoming a paying customer. There is no golden formula to lead scoring; sales teams need to try various permutations and combinations, tweaking them along the way until they arrive at a system that works for them.

Different types of qualified leads

Not all leads are the same, and neither are all qualified leads. Leads can be qualified based on how much interest they’ve expressed in your products and services or what stage of the customer lifecycle they are in:

1. Marketing qualified lead (MQL): A marketing qualified lead is a person or organisation that has engaged with your marketing team’s outreach efforts but is not necessarily ready for interaction from the sales teams. They are people that have indicated some interest in your products and/or services, but more information needs to be gathered about them before you can take them seriously. 

2. Sales-qualified lead (SQL): A sales-qualified lead is a person or organisation that has explicitly expressed interest in becoming your paying customer. Usually, a sales-qualified lead is so qualified because they have willingly given you information highlighting their interest in purchasing your products and/or services. 

3. Product-qualified lead (PQL): A product-qualified lead is a person or organisation that has already used your product and/or service and has then expressed interest in becoming a paying customer. Product-qualified leads usually exist for companies offering free trials or samples of their products or services. Product-qualified leads are valuable because they have already used your product/service and thus have a high potential for conversion.

4. Service-qualified leads (SQL): A service-qualified lead is a person or organisation that indicates to your customer service or sales team that they would like to buy your product and/or service. This is the most qualified type of lead because they are literally walking up to you and offering to buy whatever you are selling. A service-qualified lead might also be an existing customer looking to upgrade to a premium version of your product and/or service.

Automatic sales lead generators

Potential leads interact with your company and brand through various online and offline platforms. Tracking all these interactions to use them for lead generation is a big task, which is why automating it via lead generation software is the way to go.

Lead generation software tracks the various touchpoints potential leads can use to interact with your company and brand and collects and collates information about them. Some of these touchpoints are:

1. Your website

2. Pop-ups forms

3. Live chats

4. Chatbots

5. Comments and direct messages on social media

6. Entries in contests

7. Marketing emails

8. Physical interactions at conventions and expos

The primary tools you can use for online lead generation are:

1. Lead generation software: It helps you monitor interactions, track them, and collect related data. Different lead generation software offers different capabilities, but what you need is the ability to gather information from any form on your website, social media, or chatbots; consolidate this data on one platform; and create points of engagement such as pop-ups and hello bars that help turn website visitors into leads. 

2. Visitor analytics: Visitors to your website navigate it in ways you might not know. As such, it is difficult for you to understand which parts of your website are encouraging the most engagement and which ones the least. Some available website visitor analytics tools create a colour-coded map or heat map of your website that highlights how users navigate and engage with your website. These tools also help you understand traffic flow to your website in terms of quantity and time and monitor which calls-to-action are eliciting the most responses. 

3. Form-scraping tools: A form scraping tool collects data from all the various forms on your website and concentrates it in a central lead generation database. Using a form-scraping tool allows you to automate the collection of lead data from multiple touchpoints on your website in one place. Apart from helping you scale data collection easily, a form-scraping tool ensures that no lead falls through the cracks.

Converting anonymous visitors to leads

Anonymous visitors to your website are not yet leads, but they can be. The whole point of lead generation is to convert anonymous visitors to your website or social media channels into leads that can then be nurtured to become paying customers. Converting anonymous visitors to leads is an exercise in data collection. The type and amount of data a company needs to collect to convert an anonymous visitor to a lead depend on the nature of the product and service the company is trying to sell. Below are some ways in which you can encourage visitors to your website and social media channels to give you information that allows you to convert them to leads:

1. Pop-up forms: Cleverly placed pop-up forms can help encourage visitors to your website to provide their contact information. A welcome pop-up on your landing page can encourage them to sign-up for your newsletter, or exit intent pop-ups can be triggered when visitors show signs of leaving your website. Pop-up forms can also entice users to give their email IDs in exchange for a discount coupon or free e-book.

2. Offers: You can use pop-ups, banners, and other types of ad placement to barter offers for visitors’ contact information. This creates a win-win situation where the customer gets an offer, and you get information that could help convert them to lead.

3. Contests: They are an easy way to convert visitors to leads. Contests not only encourage visitors to volunteer their information, but they also cause engagement. Visitors who participate in a contest have a vested interest in your company or brand. 

4. Social listening: Social presence is mandatory for companies and brands in today’s day and age, but merely presence might not be enough for strong lead generation. Companies and brands need to practice social listening, monitoring their social profiles and understanding the reactions followers and visitors have to their posts. Social listening sends a positive message to prospects—telling them that the company or brand is listening and cares. 

5. Events and conferences: Online sales lead generators might be an effective and convenient way of going about things, but certain offline methods of generating leads are still relevant. Presence at events, conferences, and expos gives your company or brand visibility and allows you to put your best foot forward. Interact actively, capture leads by collecting contact information, and diligently follow up.

Understanding sales pipeline and lead routing

When you put together individual sales funnels, you get your sales pipeline. A sales pipeline can include individual sales reps or the entire company.

A sales pipeline is a visual representation of where all your current leads, prospects, and customers are in their journeys through your sales processes. Understanding who your leads are, how many are in your pipeline, and what stage of the funnel they are at can help you communicate with them in a timely, relevant, and compelling manner to push them along their journey. A clear view of your sales pipeline is also a good starting point for improving your company’s revenue forecasting.

You can check the health of your pipeline by looking at metrics such as:

-    Number of deals

-    Average deal size

-    Your closing rate

-    Average duration to close a deal 

Sales pipelines also give you a clear picture of stagnant or slow-moving leads and deals. Looking at a sales pipeline can give you insights into the stages most deals get stuck at, factors that could be affecting the rate at which you close deals, and where you need to divert more of your time and efforts to close deals easily, etc.

Sales lead generators are important for keeping pipelines full and flowing. A continuous and consistent inflow of quality leads helps salespeople generate revenue from new sources while also focusing on growing sales from existing customers in new ways. 

Ideally, as and when new leads are generated, these should be assigned to specific sales reps to avoid duplication of efforts. Through the process of lead routing, leads are distributed among the sales team members for qualification and nurturing.

Consider using a sales CRM solution that can help you automate the lead routing process to save time and ensure no critical leads are missed. This can be done at random, simply assigning one to the next rep in line as leads are generated. Or you can use a lead routing tool to assign leads to the right reps based on different criteria like the lead’s geographical location, each sales rep’s bandwidth, area of expertise, time of availability, etc.

Strategies for lead generation

We have already spoken about strategies to convert an anonymous visitor to a lead, but how do you land the anonymous visitor in the first place? Lead generation can happen at various online and offline customer touchpoints. Below, we discuss some strategies for several of them.

1. Strategies for online lead generation

There exist a wide variety of tactics and strategies for online lead generation, depending on the particular platform you are using to capture leads:

a) Twitter lead generation: Twitter offers a valuable feature—Twitter Lead Gen Cards—that allows you to gather lead information directly within a tweet. All potential leads need to do is input their name, email address, and Twitter handles into the card and click the “Submit” button. For your part, you need to create compelling Twitter content that engages visitors and pushes them to interact with you actively. 

b) Facebook lead generation: Lead generation tools are a part of Facebook’s product offerings. You can use paid advertising to draw leads from your website or Facebook profile. You can also include clickable links on your Facebook page that redirect users to your website. Engaging content is key to getting visitors to click. 

c) LinkedIn lead generation: LinkedIn makes capturing information about a lead very easy. Their Lead Gen Forms auto-populate users’ profile data when they click on a call-to-action button put in place by you. LinkedIn profile data includes helpful information such as the user’s employer and designation; using LinkedIn for tool generation is very effective, especially in the case of B2B sales.

d) Search engine lead generation: Popular search engines like Google get daily traffic in the range of billions. A strong presence on search engines will likely redirect many online visitors to your website. For the best discoverability, you can start a pay-per-click campaign buttressed by solid website fundamentals like search-engine-optimised content, effective targeted keywords, etc.

2. Strategies for offline lead generation

Lead generation can also happen offline. In many cases, offline sales lead generators might even be more effective than their online counterparts because the ability to interact with a lead in person can have powerful implications for qualifying them.

a) Guest-speaking at conferences and events: Guest-speaking at conferences and events is a great way to project your expertise in your work. Sharing information is an excellent way of engaging your audience, many of whom are presumably interested in your product and/or service if they stick around to listen to you. Ensure that your speech is useful for the audience, not simply a sales pitch for your company, products, and services.

b) Presence at expos and trade shows: Presence at key expos and trade shows is a great way to generate leads. Ensure you have active demos of all your products and services and sufficient trained staff to interact with visitors and answer any questions they may have. Your team needs to be diligent about capturing lead contact information and, more importantly, following up with them after the expo or trade show.

c) Referrals: Referrals are powerful sales lead generators, especially in the case of B2B sales. To encourage referrals, you could offer a referral bonus of sorts. If not, at least make sure that you thank the individual who gave your reference for doing so.

d) Loyalty programs: Loyalty programs are a great way to draw in leads, especially for businesses with a brick-and-mortar presence. Loyalty programs encourage potential leads to volunteer their information for signing up and, as a bonus, encourage them to keep coming back.

Best practices for sales lead generation

Quality lead generation is incredibly significant for any sales team. Follow these best practices to ensure your sales team’s time and energy go into chasing leads that are likely to convert. 

1. Consider your end goal: Effective lead generation begins with clearly defining your end goal. A well-defined goal helps you target and identify the right type of leads, thus increasing the likelihood of converting them into paying customers.

2. Define your target audience: Defining your target audience helps direct your lead generation efforts towards suitable campaigns, channels, and audience personas. If you know your target audiences, you can focus your time and resources on communicating the right solutions and value propositions with specific audience segments based on their needs and aspirations.

3. Create engaging content: Converting a lead into a customer requires making them aware of relevant products and services and keeping them engaged in meaningful ways. Add value to your leads’, prospects’, and customers’ lives by giving them new information or perspectives.

4. Offer clear paths of direct communication: Make sure your contact details are prominently displayed and easy for your leads to find. Leads might have questions or doubts about your offerings or want to reach out to you to make a purchase. The easier it is for them to reach you, the higher the likelihood of them becoming customers.

5. Offer incentives: Offers, coupon codes, and other incentives can be immensely helpful in lead generation and conversion. From a lead generation perspective, incentives can help convince prospects to volunteer contact information, thus making them leads. From a conversion perspective, incentives can help nudge leads into making purchases and thus becoming customers.

6. Monitor and tweak: It’s important to constantly monitor and tweak your lead generation strategy to ensure that you generate the correct quantity and quality of leads. Important metrics to monitor are cost per lead, lead conversion rate, and lead conversion time.


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Teamwork for effective lead management

These changes to the buying journey have also affected the roles of sales and marketing when it comes to lead management.

  • In the past the two teams had separate clearly defined roles – marketing would generate a list of leads, and then sales would try to turn those leads into clients.
  • Today marketing plays a much bigger role in the sales cycle than it has in the past, and lead management has become more of a collaborative effort.

Rather than simply handing over a list of leads from one team to the other, they work together to define which leads are ideal and nurture relationships with those leads throughout the sales cycle. The marketing team can consider specific demographic information and behaviours to qualify and score leads to ensure that they are ready to be passed on to sales.

What makes a lead Qualified?

  • A marketing qualified lead is deemed more likely to become a customer than other leads. They show particular interest and could respond well to lead nurturing, though they may not yet be ready to buy. As the lead moves further along the sales cycle, often as a product of nurturing, it can be passed on to sales.
  • A sales qualified lead is nearly ready to make a purchase, but may have more specific questions or needs to be addressed by the sales team. At this stage, sales staff continues nurturing the relationship that marketing initiated. Because these leads have already been qualified, they are more likely to turn into sales, and the latter part of the sales cycle tends to move more quickly. Strong marketing-sales alignment can result in more effective lead generation and higher conversion rates.

Getting the most out of lead generation

Most companies employ multiple different strategies for lead generation rather than relying on a single one. This allows them to reach a variety of target customers at different stages of the buying cycle. These include

  • Inbound marketing
  • Outbound marketing
  • Sales and marketing alignment

What is inbound marketing?

Inbound marketing is a key lead generation strategy. It can be described as a process of generating interest in your company through content creation and promotion.

  • Content Creation is a marketing strategy that involves creating relevant content to draw in leads looking to address a specific issue. This can be achieved with blogs, videos, eBooks, infographics and other publications.
  • Content Promotion is how that content is then made visible to potential customers using search engine optimisation (SEO), pay per click (PPC) advertising, and social media, among other techniques.

What is outbound marketing?

Certain elements of outbound marketing have become less effective in the age of internet research, but it can still be a useful tool when combined with inbound marketing to target specific opportunities and reach out to leads. Some examples of outbound marketing include emails, events, advertisements.

  • Email Marketing can be used to distribute new content, send out event invitations, share news, and stay in touch with customers. It’s a way to provide content to potential leads who may not be looking for you.
  • Event Marketing creates an opportunity to share your brand, build personal relationships with customers, and engage with attendees.
  • Display Ads can be targeted to prospects with certain habits or demographic traits. They allow you to share information with a specific audience.
  • Content Syndication is the practice of sharing your content on third party websites to draw additional attention to your brand.

Sales and marketing alignment

Good marketing and sales alignment is key to any successful lead generation strategy. Marketing may be on the front line when it comes to lead generation, but that doesn’t mean sales can’t help out. Using techniques like social selling, outbound emailing, and networking, the sales team can take lead generation into their own hands.

Lead Qualification and Filtering is the process of determining whether a lead is ready to be passed on to sales based on things like customer demographics and behaviours. Some leads will be filtered out, because they are not yet at that stage or appear less promising than others – focussing on unqualified leads is a waste of time and resources. Customer relationship management (CRM) software can be used to track and evaluate leads before distributing them to sales.


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Zeroing in on the best prospective leads

Successful lead generation is no longer measured simply based on the quantity of leads a company acquires. Leads can now be tracked, monitored, and ranked using lead generation metrics and lead scoring.

Some examples of commonly used lead generation metrics include:

  • Click Through Rate (CTR) is a percentage made up of the total number of clicks divided by the number of page views. It determines the success of a call to action.
  • Time to Conversion is how long it takes to turn a lead into a paying customer.
  • Return on Investment (ROI) is the financial gains calculated against the total cost of a campaign.
  • Number of Marketing Qualified Leads (MQL) is the number of leads that the marketing team has deemed ready to pass on to the sales team. Leads are often qualified using lead scoring.
  • Cost per MQL is how much money is spent on each lead before they become customers with the goal of maximising results while minimising costs.

What is lead scoring?

Lead scoring is a methodology of ranking and prioritising leads based on their value so that sales and marketing can focus on the leads with the most potential, rather than nurturing them all equally. A company can conduct a meaningful evaluation of a potential customer using a combination of explicit and implicit lead scoring.

  • Explicit lead scoring considers how closely a lead’s profile matches the buyer persona of an ideal customer. This is demographic data and information about a customer, such as the job title, industry, or location. It shows how relevant a potential lead is to your company.
  • Implicit lead scoring takes into account how often and in what ways a potential lead interacts with your business. This is measured through indicators, such as visits to the company website, the lead’s actions carried out there, or responses to email marketing. Implicit lead scoring shows how much interest a potential lead has in your company.

Whether you’re dealing with consumer or business leads, successful lead scoring depends on a number of factors, such as high-quality content, well-defined buyer personas, relevant interactions, and involvement of the sales team. Lead generation software can be a useful tool, as often includes automated lead scoring. Learn more about how to generate leads on the blog.

More than just a list of names

Lead generation is a key element in the sales process that has changed in recent years alongside shifts in sales and marketing landscape. Generated leads are no longer an indiscriminate list of names that marketing hands to sales. Leads are generated today by drawing in potential customers using a variety of methods, offering them useful information, building and nurturing relationships, and evaluating which leads are ready to move forward in their buying journey. 


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