What is Lead Generation? How to Generate Leads Effectively & Close More Deals

Lead generation is the necessary first step of the sales process for attracting potential buyers and moving them into your sales funnel. In this article, you’ll learn proven strategies, a step-by-step process, and which software tools will keep your sales pipeline consistently full of opportunities, ultimately leading to a repeatable cycle of new deals closed.

What Is Lead Generation?

Lead generation is the first stage in the sales process, where a potential customer (qualified or not) starts their customer journey by being added into the sales funnel. It involves sales pipeline activities for creating awareness as well as gauging the buying interest of a person or organization through advertising, marketing, or direct sales activities.

Strategies for Lead Generation

There’s no one-size-fits-all approach to lead generation and in most cases, a combination of strategies will be needed to diversify lead sources and maximize opportunities. When determining which strategies to use, those in sales management positions must consider their business’ budget, resources, skill sets, target market, expertise, and more.

Inbound Lead Generation

One approach to consider is having potential customers come to you, known as inbound lead generation. Inbound marketing involves a high degree of knowledge and work behind the scenes to create referral pipelines or use online search-optimized marketing and advertising as a “lead magnet” to attract interested buyers.

A few specific tactics for inbound lead generation include:

Referrals: Develop a network and various partnerships with other people, businesses, or even your current customers to get them to send you leads. Generating referrals is one of the best ways to generate leads because it doesn’t take a lot of additional resources, and each lead is automatically marketing-qualified, if not sales-qualified.
Content marketing: Create articles, graphics, white papers, case studies, videos, or podcasts for your website on topics your target audience finds value in. This tactic works best in conjunction with search engine optimization (SEO) and paid advertising in order to get traffic to the page where the content is posted. You can tailor the types of content you engage various types of leads with by creating customer profiles, which help you decide what types of messaging appeal to different target audiences.
Traditional advertising: Though it can be expensive, direct mailers, newspapers, magazines, radio, television, and even billboard advertising is another way to get in front of a large audience. Whatever the advertisement is, craft a call to action such as stating “call us at this number to learn more.”
Paid search advertising: Pay to have your business’ listing pop up in the top section of search engine results. Anytime someone searches your product, service, or solution on Google or another search engine, your ad will be one of the few at the top of the page. This tactic is merely a catalyst to create awareness—you still need the lead to contact you or submit a website inquiry to actually generate a lead.
Website form submissions: This tactic is generally part of another inbound tactic. Through content marketing, advertising, social media campaigns, and even referrals, the call to action directs the individual to a website form, usually on your website, where they can then shop, download something, subscribe, request a quote, or otherwise submit their information to be contacted by you.
Social media campaigns: Social media campaigns include either organic posts or ads run on social media such as Facebook Ads or LinkedIn Ads. This tactic pairs well with content marketing, such as if you want to create a video, podcast, or blog and run a campaign to increase its reach.
Educational seminars or webinars: Hosting an educational seminar or webinar is another effective way to generate marketing qualified leads, and can be done in person or online. It works particularly well in business-to-business (B2B) lead generation, such as workshops or webinars that enable business owners to learn more about how to solve common business challenges, although it can be equally effective with long-process or high-ticket consumer items, such as a seminar for first-time homebuyers.

Outbound Lead Generation

Alternatively, or more likely in conjunction with inbound lead generation, your business can actively find and engage potential customers using outbound tactics. This strategy is most effective for sales-centric companies that successfully personalize the buyer’s journey by connecting with them directly.

Here are some common ways to generate outbound leads:

Purchasing leads: Purchasing leads is more of a precursor to other outbound lead generation examples like cold calling or email introductions. By purchasing leads, you get a list of contacts with their information to start the outbound sales process. While there are many reputable places to buy business leads, these leads will be unqualified to start because they’ve had no prior engagement with your business.
Cold calling: Cold calling can be intimidating for those who have never done it before, but is the fastest way to qualify a lead and determine interest. When cold calling, you make an introduction and get an immediate response. Our how-to guide for writing cold calling scripts and our beginner’s guide to cold calling can help you get started with this tactic.
Email introductions: Sending a cold email is another introduction method you can use to create awareness and potentially qualify a lead. Email introductions work better if you use them to send examples of your work, like a project portfolio or case study, and you have a creative way to pique the lead’s interest, such as a free trial or demo, or an industry white paper they can download.
Networking events: Attending networking events lets you collect business cards of others and personally connect with people in-person or over video conference calls. During these events, you get a chance to give your sales pitch about what you do and learn if your solutions are appealing to the people you meet.
Trade shows: Setting up a booth at an expo, conference, or trade show puts your business directly in front of hundreds to thousands of attendees. The key for this tactic is finding the right events to attend that have your target audience and developing an exciting booth by using raffles and giving away swag.

Pro tip: Use lead scoring to measure and identify leads with the best chances of becoming paying customers. Factors that go into a high lead score include where they were generated and how much they interact with your marketing content.

How to Generate New Leads in Six Steps

Much of the lead generation process involves trial, error, and testing to see what works. For example, you may find the target audience you initially intended doesn’t end up being the one that creates the most opportunities. The overall market may change, new competitors or alternatives will emerge, and the tactics that work well for one audience may be different from those that work best for another.

Below are six steps for creating a lead generation campaign for your business:

1. Determine Your Target Audience

The first step for generating leads is knowing what an excellent lead looks like, as this dictates the channels and the specific tactics you use. One way to determine your target audience is by creating a customer persona. Personas are representations of your ideal buyers based on their demographics, interests, behaviors, roles, and job responsibilities.

As personas are developed, you’ll be able to determine the channels, messaging, and calls to action to use to attract each type of ideal customer. For information and a free customer persona template, check out our guide on how to create a customer persona.

2. Establish Your Strategy

Once you know the “who,” establish whether you want to do an inbound strategy, outbound strategy, or a hybrid of both. You can also narrow down the specific tactics you wish to use, and it’s important to note that different personas may require different tactics.

For instance, if one of your target audiences is younger and another is much older, you may need to use social media campaigns to appeal to the younger demographic and calling, emailing, or traditional advertising to reach the older audiences. The skill sets, experience, and resources your team has also play a part in how you plan to generate leads.

The chart below indicates required attributes when using different types of lead generation ideas for business-to-consumer (B2C) as well as business-to-business (B2B) sellers:

Tactic	Budget Requirements	Primary Skills/Resources Required	Good for B2C?	Good for B2B?
Referrals	Little to no cost	Robust network and sales skills	✔	✔
Content Marketing	Can be expensive, especially if outsourced	Creative, copywriting, SEO, graphic and web design, and other digital marketing skills	✔	✔
Traditional Advertising	Relatively expensive	Creative and copywriting skills	✔	✔
Paid Search Advertising	Can be expensive, especially if outsourced	Search engine marketing (SEM) and copywriting skills	✔	✔
Website Form Submissions	Little to no cost	Digital marketing and design skills	✔	✔
Social Media Campaigns	Can be expensive, especially if outsourced	Creativity, copywriting, graphic design, digital marketing, and social media management skills	Depends on channel	Depends on channel
Educational Seminars	Little to no cost if virtual but can be expensive in-person	Public speaking, professional knowledge, and some sales skills	✔	✔
Purchasing Leads	Moderately expensive	No specific skills required	✔	✔
Cold Calling	Little to no cost	Professional sales skills	N/A	✔
Email Introductions	Little to no cost	Creativity and sales skills	✔	✔
Networking Events	Can be expensive depending on event	Robust sales skills	✔	✔
Trade Shows	Relatively expensive	Sales skills and excellent marketing materials	✔	✔

3. Execute Your Tactic

Executing the tactic with solid messaging and communication is just as important as choosing the right one. Based on the target audience, each tactic will determine what the message is, how it’s sent, and where. For example, when cold calling, the message is an introductory elevator pitch, using some type of cold calling script over the phone.

For content marketing, the message is the topic or main point within the content delivered, where it can be consumed by a lead on a website or social media channel. Trade shows involve use of branded items, posters, and signs to deliver your message. Educational seminars or webinars require choice of location (online or off), development of audience-valued content, and a call to action that ties back to your business’ unique value proposition or offerings.

One last thing to consider for the execution stage is whether or not you want to do it in-house or contract it out. For example, cold calling and introduction emails be done on behalf of your business by a lead generation company.

Similarly, creating content or ads, designing pages on your website, and managing social media can also be contracted out to marketing agencies or freelancers. While it may be more expensive, the return on investment (ROI) of outsourcing tactics to experts may be well worth the cost.

4. Initiate a Call to Action

No matter what tactics are used or whether tactic execution is done in-house or outsourced to another firm, it needs to be followed by a call to action. An effective call to action is one that gets the prospect to show they are interested and become a qualified lead. Below are some examples of initiating a call to action based on the tactic employed:

Content marketing: After a video, article, or podcast, let the audience know they can learn more by calling a certain number, emailing your business, or submitting a website form.
Traditional advertising: In the advertisement, specify the number they can call, website URL to visit and fill out a form, or email address they can use to contact your business.
Paid search advertising: Use buttons that signal the next step to the audience. It could say “shop now,” “click here to learn more,” or “sign up for an appointment.”
Social media campaigns: Use buttons that signal the next step to the audience. It could say “follow us on @accountname” or “check out our website to learn more.”
Educational seminars: As part of the seminar, let attendees know how you can be reached via phone, email, or your website. Make sure you use some kind of sign-up sheet to collect attendees’ contact information to use later for direct selling follow-ups. Alternatively, online webinars allow you to collect the sign-up information of all those interested, whether they attend or not, for future prospecting or lead nurturing activities.
Cold calling: During the call, initiate the next step by setting up product demos, sales presentations, or getting their email address to send more information about your product or service.
Email introductions: State in the email they can check out your website, call you, or respond to the introduction email to learn more or move to the next step.
Networking events and trade shows: Give leads your business card or other marketing materials that have your contact information. You also can collect their business cards or ask for their information and then reach out to them directly after the event. One effective way to gather lots of contacts at events like these is to incentivize information sharing with giveaway prizes or a post-event drawing for a highly desired item, such as an iPad.

5. Measure Effectiveness

As you execute tactics and initiate calls to action, measure the effectiveness of your strategies based on how many people respond to the call to action. There are many ways to measure effectiveness for all types of channels.

Below are some metrics to consider:

A visual representation of lead generation metrics with digital marketing vectors.

Sales qualifying lead (SQL) rate: For direct sales activities like cold calling or emailing, this is the percentage of leads interested in learning more in a presentation, demo, or receiving pricing information.
Actionable lead rate: If you purchase leads, this number is the percentage of contacts in which the contact information is accurate.
Cost per engagement: If you are running an ad or social media campaign, this is the total amount of money spent divided by the total number of people who interacted with your campaign. Interaction could include responding to the call to action or clicking on the ad.
Cost per lead: This is the total amount spent for a lead tactic or specific campaign divided by the total number of leads generated.
Total return on investment (ROI): This is the percentage of revenue generated from a lead tactic or specific campaign divided by the cost of deploying it.
Lead-to-sales ratio (closing rate): The percentage of deals closed based on the total number of leads generated. This is an important metric because it tells you how many leads you need to generate to close a particular amount of deals. For example, if your closing rate is 5% and you want to close 40 deals, you need to generate 800 leads.

Pro tip: Sales metrics extend beyond numbers. They show overall growth potential and track all parts of the sales process. For more sales metrics to help you analyze your sales operation, check the top sales metrics to use to improve your performance.

6. Adjust Your Strategy

There’s no sense in measuring the effectiveness of your efforts if you don’t plan on doing anything with those numbers. As mentioned earlier, finding the best tactics for your business involves trial and error, and metrics show you what’s working and what isn’t. Knowing this, you can adjust your strategies and tactics accordingly.

The numbers might show that an overall tactic isn’t working or that a tactic is working better with one customer persona over another. For instance, let’s say you are doing a cold calling campaign and running an online ad with video content targeting business owners as well as information technology (IT) directors. During each of those campaigns, your sales qualifying lead rates are as follows:

Cold calling business owners is 3%
Cold calling IT directors is 7%
Video content for business owners audience is 5%
Video content for IT directors is 2%

This tells you cold calling is more effective when targeting IT directors while video content is better for business owners. That being said, you should adjust your strategy and get more contact lists for IT directors to cold call while adjusting your online ad campaigns to target more business owners.

Types of Leads

An important part of lead generation is lead qualification, which allows you to organize and identify different types of leads. As you generate leads, each of them will fall into one of four categories depending on their interaction, interest level, and where they came from.

The four main types of leads include:

Unqualified lead (UQL): Any contact that could be a good fit for your business but has not expressed interest or connected with you yet. When you purchase a lead list, those are unqualified leads.
Marketing qualified lead (MQL): Anyone who has expressed some level of interest in your business by interacting with a marketing campaign. Examples include clicking on an email link, submitting a web form for a special offer, signing up for your newsletter, downloading something, or engaging with a social media campaign.
Sales qualified lead (SQL): Someone who has expressed a high degree of interest in your business’ offerings by requesting pricing, signing up for a free trial, agreeing to a presentation, or talking with a sales rep.
Product qualified lead (PQL): A lead who has used a product through a free trial or free-forever plan and has expressed interest in becoming a paying customer. For example, when someone uses a software free trial and reaches out to a sales rep about a feature or pricing, they have become product-qualified.

Pro tip: When conducting lead qualification, use the budget, authority, need, and timeline (BANT) method to rank your leads and score them. Learn more about how to use this strategy in our article on how to use BANT to find qualified leads.

Tools for Lead Generation

Lead generation is far easier when you have the right tools at your disposal to organize information, streamline processes, automate tasks, and facilitate strategy execution. Effective software tools put you in the best position to generate leads, keep your sales pipeline full, and move prospects through the stages of your sales funnel.

Lead Databases

Lead databases allow you to purchase contact lists to reach out to on your own. UpLead, for instance, is a provider of high-level B2B leads lists. Users can filter leads based on job titles, location, industry, and the technology the organization uses.

UpLead search filtering leads based on job titles, location, industry, and technology.

UpLead technology contact filtering (Source: UpLead)

Businesses primarily engaged in B2C selling can use Salesfully to generate consumer lead lists. Salesfully pulls data from personal attributes such as location, age, ethnicity, occupation, and income to ensure you find the exact personas you want to target.

Salesfully lead filtering pulls data from personal attributes such as location, age, ethnicity, occupation, and income.

Salesfully lead filtering (Source: Salesfully)

Website Landing Pages

Use a website builder to develop a professional website with landing pages for directing leads to a page where they can submit a web form inquiry. Platforms like Squarespace allow you to build lead-generating web pages and forms with hundreds of premade templates depending on your type of business.

Bailard Foundation homepage built using Squarespace web page template.

Squarespace web page template (Source: Squarespace)

Reputation Management

Reputation management includes acquiring reviews. This is essential as it gives buyers a way to evaluate your business and its offerings before becoming leads. Podium Starter is reputation management software that helps you get Google and Facebook reviews by sending your current customers texts that lead them to the review page.

Podium starter sends a text with review links to get Google and Facebook reviews from the customer.

Podium leave a review text (Source: Podium Starter)

Customer Relationship Management Software

Customer relationship management (CRM) software offers tools for organizing lead information, tracking lead statuses, and communicating with leads. Salesforce, for example, is a popular CRM system for storing lead data such as their contact information, pipeline status, and activity history with each lead.

Salesforce lead management stores contact information, pipeline status, and activity history with each lead.

Salesforce lead record (Source: Salesforce)

CRMs like Freshsales also have lead scoring tools where you can evaluate the quality of your leads generated based on predetermined criteria such as where they came from and their interactions with you. This way, as leads are generated, you can prioritize your time on the hot leads that have the best chance of becoming customers.

Freshsales tools for lead score customization based on lead quality.

Freshsales lead scoring customization (Source: Freshsales)

Freshsales lead with lead score (Source: Freshworks)

As SQL’s are generated, you can treat each new lead as an opportunity. The HubSpot CRM, for example, lets you track the status of each lead using deal management features. Deals are shown in a Kanban-style view under the relevant stage that your business is currently at with each lead.

HubSpot CRM deals management that lets you track the status of each lead.

HubSpot deal management (Source: HQ Digital)

Businesses looking to do high-volume cold calling campaigns may find power dialing tools in CRM systems especially useful. Power dialing lets you preset a list of contacts to call and automatically dials the next call when a call is finished.

This prevents error and saves time you would spend manually dialing calls. It also allows your sales reps to focus exclusively on the conversation. Freshdesk offers this feature and integrates with the Freshsales CRM platform.

Freshdesk power dialer gets access to customer details from your saved contacts or directly from the integrated apps.

Freshdesk power dialing (Source: Freshworks)

Some CRMs have capabilities for managing lead generation campaigns through social media channels. Zoho CRM, for example, lets you configure automation rules for running social media ad campaigns such as a Facebook advertisement. As leads are generated through your campaign, they are then automatically added into your CRM system as a lead.

Zoho CRM setup for configuring automation rules for running social media ad campaigns such as a Facebook advertisement.

Zoho CRM social media lead generation management (Source: Zoho CRM)

Email Tools for Lead Generation

Email marketing software enables the deployment of mass-volume emails for cold introduction and brand awareness campaigns, both of which can generate leads. Platforms like Mailchimp make it easy to create effective email messages with tools like a subject line helper, predesigned campaign templates, and a drag-and-drop editor.

Use Mailchimp’s form builder to embed forms on your website or Facebook, and set up workflows to automatically start email campaigns to new sign-ups. Plus, Mailchimp supports digital advertising efforts, including Facebook and Instagram ads, as well as remarketing display ads on Facebook, Instagram, and throughout the Google Ad network.

Mailchimp's Email automation workflows setup.

Mailchimp email automation workflows (Source: Mailmunch)

Selection of featured and e-commerce Mailchimp Email themes.

Mailchimp email templates (Source: Venture Harbour)

Similar email tools can also be used as built-in tools within CRM systems. HubSpot, for instance, has email marketing tools that include premade templates, email scheduling, email automation, and analysis on email campaigns that show which ones are most effective.

Gallery of Hubspot's beautiful email templates.

HubSpot email templates (Source: HubSpot)

Bottom Line

Having a strategy in place for creating awareness and generating interest in your products and services is critical to bringing in revenue for your business. Implementing these tactics, measuring their effectiveness, going through the trial and error process as well as using the right software tools will help your sales team keep the pipeline full with high-quality sales opportunities.