What is lead generation?


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.

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.

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.


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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. For more detailed information, visit our blog post on “5 Ways You Can Generate More Qualified Leads ”.

That’s a lot of info!

Here’s what you should take away from this article:

  • What is a lead? A lead is someone who has shown interest in a company’s products or services, without necessarily deciding to buy.
  • What is lead generation? Lead generation is identifying and attracting potential new customers, which is a crucial part of any sales operation.
  • How has lead generation evolved? Lead generation now leverages technology to prioritise leads and tailor marketing activity.
  • Has the digital age changed the buying journey? The digital age has changed the buying journey by enabling shoppers to research products online before contacting suppliers.
  • What makes for effective lead management? Lead management is most effective when sales and marketing work together to identify the strongest leads.
  • What are the key strategies for lead generation? The key strategies for lead generation include inbound marketing, outbound marketing and sales and marketing alignment. 
  • What is inbound marketing? Inbound marketing is a marketing strategy that attracts potential customers by creating and promoting content.
  • What is outbound marketing? Outbound marketing is a marketing approach whereby sales teams reach out to potential leads, e.g. by phone or email.
  • How is lead generation measured? Lead generation is measured by metrics that track, monitor, score and rank leads.
  • What is lead scoring? Lead scoring is a way of ranking and prioritising prospective customers based on their potential value.

Frequently Asked Questions


What is lead generation?

Lead generation is the process of increasing sales by directly targeting potential customers who have shown interest in a company’s products or services. New technology has transformed lead generation from cold-calling by sales reps to sophisticated digital marketing informed by data-driven insights into customer demographics and tastes.

Who needs lead generation?

Any e-commerce company that sells directly to end consumers will benefit from a robust lead generation programme. Lead generation makes the sales cycle more efficient by focusing on the strongest and most valuable leads and optimising marketing input. This results in greater success in new customer acquisition and conversion rates.

Is lead generation sales or marketing?

Today, lead generation falls under both sales and marketing, as connected teams now work collaboratively throughout the whole process. The marketing team uses lead scoring methodologies to rank and prioritise leads, before passing them on to the sales team. The sales team nurtures the customer relationship to complete the sale.

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